Abstract
As China started to collect environmental tax on pollutant emitters, local governments were given autonomy to set tax rates that reflects regional differences to increase the policy efficiency. Previous studies have argued for efficient environmental regulations that equate the marginal damage of pollution to marginal abatement costs across space. Nevertheless, barely no study in China has estimated the source-specific marginal damages, preventing regulators from considering efficient environmental taxing regimes that exhibit spatial heterogeneity. Therefore, this paper measures the marginal health damage of air pollutant emissions from coal-fired power plants in BTH area (Beijing-Tianjin-Hebei area, which will be referred to as BTH area in the following text) using a sophisticated integrated assessment model. The results show that marginal damages varies a great deal across space: the range between the lowest and highest emission source is $1999 to $31185 per ton for SO2, $283 to $4416 per ton for NOx and $2102 - $131886 per ton for PM2.5, respectively. The marginal damages are driven by proximity to highly populated areas and meteorological conditions, which means coal-fired power plants located in downtown areas and upwind of highly populated areas have larger marginal damages than other sources. Then based on the marginal damage estimation, the relative taxing ratios are calculated. In this way, his study provides a marginal pollution damage evaluation approach that builds the base for efficient source-specific environmental taxing regimes that reflects spatial variation.
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