Comparison of economic instruments to reduce PM2.5 from industrial and residential sources

Abstract

In the literature, it is possible to find different studies that compare economic instruments performance applied to the industrial sources regulation; however, evidence about pollution from residential sources is scarce. For this reason, the present study simulates and compares an emission permit system (EPS) and an ambient permit system (APS) when fine particulate matter pollution (PM2.5) is generated from industrial and residential sources. Thus, this research contributes to the spatial, economic and environmental assessment of industrial and residential emissions. The options to reduce pollution include replacement of heating devices in residential sources and installing end-of-pipe technologies in industrial sources. The results in terms of total cost and technological chosen options are similar under an APS and EPS for targets lesser to 80%. This is explained because it is more cost-effective to reduce emissions in residential sources than in industrial sources, and additionally, residential pollution has only local impact. However, some industrial sources should install abatement technologies for more demanding targets; in this case as industrial pollution are scattered in different areas, the total cost of an APS are lower than the total cost of an EPS.