Quantifying the effects of air pollution control policies: A case of Shanxi province in China

Abstract

With a rapid growth rate of economic development in China, air pollution has attained to an extremely high level. Consequently, air pollution has become a pressing challenge facing Chinese authorities. To control air pollution, a variety of economic instruments (such as Pigou tax and Coase means) as well as command and control means (such as environmental regulation, etc.) have been adopted. As one of China's important energy resources bases, Shanxi Province is also one of the most polluted regions. Therefore, the adapted air pollution control policies and its influence in Shanxi Province is representative for China. With this regard, a dynamic computable general equilibrium (CGE) model is constructed to evaluate the effects of air pollution control tools including SO2 taxation, clean technical progress (CTP) and energy efficient (EE) improvement, etc. and their socioeconomic impacts on Shanxi province. The results indicate that, in a variety of scenarios, SO2 taxation combining with technical progress can effectively control air pollution, improve energy consumption structure, and do not exert remarkable negative impact on economic performance. Additionally, significant synergistic effects of CO2 and PM2.5 emission reduction and energy rebound effect are found as well.