Climate co-benefits of VOC control policies in China based on a cross-scale approach

Abstract

Volatile organic compounds (VOC) contributing to smog formation, have been an important indicator of atmospheric governance during China's “14th Five-Year Plan”. VOC would be possibly incorporated into the scope of environmental protection tax, but previous studies have seldom explored impacts of VOC control policies at national and regional levels. Here, we design a national uniform VOC control policy, as well as two regionally differentiated policies based on regional disparities in PM2.5 concentrations and energy intensity by using a cross-scale dynamic computable general equilibrium (CGE) model. Our analysis is to assess the impacts of these policies on VOC, CO2, sulfur dioxide (SO2), nitrogen oxides (NOX), and PM2.5 emissions, air quality and environmental equity, and to estimate health benefits, policy costs and net benefits. We find that national and regionally differentiated VOC control policies generally lead to VOC emission reductions and generate co-benefits on emission reductions in CO2, SO2, NOX and PM2.5 at national and provincial levels. However, regional emission leakage exists due to differences in the provincial costs of VOC mitigation. The regionally differentiated VOC pricing policies are found to be more effective to enhance environmental equity than the uniform policy. In particular, the regionally differentiated VOC control policy based on provincial energy efficiency is found to be superior to other policies in terms of improve air quality. Furthermore, the human health benefits associated with VOC pricing policies would partially offset policy costs at both the national and regional levels. Our results suggest that policymakers would pay attention to developing regions with low energy efficiency which have the great emission reduction potential. Advanced producing technology and further end-of-pipe control measures to reduce non-combustion PM2.5 emissions are needed. VOC policy designed based on provincial energy efficiency provides great insights for environmental policy making to accomplish 2035 goal of building a Beautiful China.