Drivers of air pollution reduction paradox: Empirical evidence from directly measured unit-level data of Chinese power plants

Abstract

This research investigates the drivers of the paradox that air pollutant emissions have fallen in the Chinese electric power sector as coal combustion continues to play a dominant role. With directly measured unit-level air pollution emissions data from Chinese power plants during 2014–17, this study quantifies the contributions of eight factors to reducing three key air pollutants (sulfur dioxide, nitrogen oxides, and particulate matter) using the Logarithmic Mean Divisia Index model. The main results are presented for aggregates of the 10 wealthiest and 20 less wealthy provinces. The dominant driver of the fall in air pollution is the emission intensity of fossil fuel use, cutting air pollution by 69%–86% in the wealthier region and 65%–72% in the poorer region. Electricity consumption per unit of gross domestic product, the second largest contributor to air pollution reduction, has reduced the three key air pollutants emissions from power plants by 7%–9% and 11%–12% in the wealthier and poorer regions. Results suggest some policy implications; implementing end-of-pipe techniques cuts air pollution by lowering the emission intensity of fossil fuel use. Meanwhile, measures such as renewable energy generation subsidies reduce the fossil fuel intensity of electricity use and indirectly cut air pollution from power plants.