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[en] Highlights: • The Environmental Kuznets Curve (EKC) has been estimated at the national and the provincial level in China. • There exists aggregation bias in estimating the national level EKC for sulfur dioxide emission. • The local government should play more important role in environmental policy-making. - Abstract: Aggregation bias may lead to a wrongly estimated Environmental Kuznets Curve (EKC), and misguide the policy-makers. This paper aims to test the existence of aggregation bias in the Environmental Kuznets Curve with the sulfur dioxide (SO2) emission. The empirical methods robust to cross-sectional dependence and slope heterogeneity reveals that the estimation of SO2 EKC in China suffers from aggregation bias. The results with the disaggregate data cannot support the EKC estimated at the aggregate level. The finding of aggregation bias has several policy implications. First, the government should not be misled by the false relationship between the pollutant emission and the real GDP per capita at the aggregate level. Second, the local governments should play more important roles in making environmental protection policies since the more disaggregate data can mitigate the aggregation bias. To provide enough incentives to the local government, the Chinese national government should align the interests of the local governments with those of the national government. On the other hand, the findings indicate that China can stick to the policy of encouraging foreign direct investment, openness and financial development since they have not influenced the SO2 emission in China.
[en] Highlights: • The impact of public opinion on haze pollution in China is investigated. • A dataset consisting of 109 prefecture-level Chinese cities is employed. • Public opinion has a positive effect on the environment only in the short run. • There is a time lag between the surge in public opinion and improved air quality. - Abstract: In recent years, serious smog and haze have shrouded vast areas of northern and eastern China, which has drawn broad attention at home and abroad. Although China is an authoritarian country with strict media control, public opinion may still affect air quality by putting pressure on the local and central governments to enhance environmental protections. In this paper, the impact of public opinion on air quality in China is for the first time quantitatively examined. Specifically, the monthly average levels of the Air Quality Index (AQI) and the concentrations of several main air pollutants, such as PM2.5, PM10 and SO2, are utilized as indicators for air quality. Using a dataset consisting of 109 prefecture-level Chinese cities for the period between November 2013 and October 2016, the estimation results indicate that air pollution significantly affects public opinion on air quality, and the surge in public opinion on air pollution occurs more frequently in the winter. Public opinion seems to have a positive effect on the environment only in the short run: air quality tends to improve two months after the surge in negative public opinion. In general, public opinion about air pollution helps to improve air quality in China.
[en] This paper focuses on the institutional framework for sulfur dioxide emission information disclosure (SDEID) in power industries. The authors argue that mandatory and voluntary SDEID are two complementary regulatory instruments for emission reduction in the power industry. An analytical framework of SDEID with six facets is suggested in this paper to demonstrate relevant legal provisions and regulatory policies of mandatory and voluntary SDEID of power industries in the US. Empirical research shows that mandatory and voluntary SDEID of the power industry have been regulated simultaneously in the US. The foundation of power companies' willingness to disclose emission information voluntarily is the combination of mandatory scientific monitoring with market regulation in the current SDEID system in the US. In comparison, the SDEID of power industries has yet to be widely implemented in developing countries. Finally, the paper provides some implications to developing countries that plan to learn institutional arrangements from developed countries. - Highlights: ► Mandatory and voluntary SDEID are two complementary regulatory instruments. ► An analytical framework is suggested to demonstrate SDEID of power industry in the US. ► Voluntary disclosure can be attributed to scientific monitoring and market regulation. ► We provide implications to developing countries learning from developed countries.
[en] Emission trading is considered to be a cost-effective environmental economic instrument for pollution control. However, the policy design of an emission trading program has a decisive impact on its performance. Allowance allocation is one of the most important policy design issues in emission trading, not only for equity but also for policy performance. In this research, an artificial market for sulfur dioxide (SO2) emission trading was constructed by applying an agent-based model. The performance of the Jiangsu SO2 emission trading market was examined under different allowance allocation methods and transaction costs. The results showed that the market efficiency of emission trading would be affected by the allocation methods when the transaction costs are positive. The auction allowance allocation method was more efficient and had the lowest total emission control costs than the other three allocation methods examined. However, the use of this method will require that power plants pay for all of their allowance, and doing so will increase the production costs of power plants. On the other hand, output-based allowance allocation is the second best method. - Highlights: ► The impact of allowance allocation methods is examined for a cap-and-trade program. ► The market efficiency would be distinct when the transaction costs are positive. ► The auction method would have lowest total emission control costs.
[en] Atmospheric environmental quality in China has been improving due to a variety of programs implemented by the Chinese government in recent decades. However, air pollution is still serious because of rapid socioeconomic development and increased energy consumption. Atmospheric environmental problems appear to be complex and regional in nature, and China's climate is aggravated by global climatic change. Air pollution originates from multiple sources and the effect on public human health will increase. The influence of acid rain in southern China will be long term, and the impact of climate change will rise. In order to reduce the adverse effects of air pollutants on the environment, the total number of emission sources from major industry, fine particle pollutants, SO2 emissions from power plants and the vehicle exhaust must be lowered and strictly controlled. The energy structure will affect the quality of the atmosphere for a long time. Increased energy efficiency, optimization of energy structure and the generation of a sustainable consumption and production patterns will provide opportunities to resolve regional and the global environmental problems
[en] Most existing energy efficiency indices are computed without taking into account undesirable outputs such as CO2 and SO2 emissions. This paper computes the ecological total-factor energy efficiency (ETFEE) of 30 regions in China for the period 2005–2009 through the slack-based model (SBM) with undesirable outputs. We calculate the ETFEE index by comparing the target energy input obtained from SBM with undesirable outputs to the actual energy input. Findings show that China's regional ETFEE still remains a low level of around 0.600 and regional energy efficiency is overestimated by more than 0.100 when not looking at environmental impacts. China's regional energy efficiency is extremely unbalanced: the east area ranks first with the highest ETFEE of above 0.700, the northeast and central areas follow, and the west area has the lowest ETFEE of less than 0.500. A monotone increasing relation exists between the area's ETFEE and China's per capita GDP. The truncated regression model shows that the ratio of R and D expenditure to GDP and the degree of foreign dependence have positive impacts, whereas the ratio of the secondary industry to GDP and the ratio of government subsidies for industrial pollution treatment to GDP have negative effects, on the ETFEE. - Highlights: ► Most energy efficiency indices ignore undesirable outputs such as CO2 and SO2 emissions. ► The ecological total-factor energy efficiency (ETFEE) is computed by slack-based model (SBM). ► The datasets contains 30 regions in China for the period 2005–2009. ► China's regional energy efficiency is extremely unbalanced. ► A monotone increasing relation exists between ETFEE and per capita GDP.
[en] This study explores empirical evidence for two hypotheses through a macro productivity analysis using the nonparametric directional distance function approach applied to the thermal power sector. The first hypothesis is that the marginal abatement cost has significantly declined in recent years mainly due to domestic flue gas desulfurization technology in China, which has become available at a reasonable cost. The second is the existence of a certain budget scale, which, with policy intervention, would have significant outcomes. These hypotheses are successfully addressed through the findings that the marginal abatement cost in 2006 had declined by half since 2003 and that the strategic allocation of 10 billion yuan for SO2 emissions abatement would result in an additional 550,000 tonnes of SO2 reductions.
[en] Highlights: • A new hybrid dynamic input-output multi-objective optimized model is proposed. • Effects of industrial restructuring on energy saving and pollution reduction are investigated. • China can basically realize its goals of energy and environmental by industrial restructuring. - Abstract: The issue of achieving the twin goals of energy saving and pollution reduction by 2020 is important for transforming China's approach to economic growth. From the perspective of source control, this study investigates the impact of industrial structure adjustment on China's energy saving and pollution reduction goals by developing a new energy-environmental-economy model, integrating a dynamic input-output model and multi-objective model. The three best solutions are screened from the Pareto-optimal front conforming to decision-makers’ preferences. The results show that for China to successively achieve its set goals, it needs to modify and optimize the country's industrial structure. By optimizing its industrial structure, China's energy intensity of the three preferred solutions can be reduced by 17.7%, 17.0%, and 17.5% compared with 2015 levels, which helps to attain the target energy-saving goal. Emissions of COD, SO2, and NOx are significantly reduced; however, the reduction goal of NH3-N is barely realized. In the restructuring process, GDP can be maintained at 6.6–6.8% from 2013 to 2020. These findings could alleviate local governments’ concerns that implementation of stringent energy-saving and pollution-reduction mechanisms would harm their local economies.
[en] Fixed asset investment (FAI) and foreign indirect investment (FDI) have important influences on economic development and environmental quality. Because environmental performance is related with economic development, FAI and FDI may affect environment indirectly through their impacts on economic growth. In this study, the direct and indirect effects of both FAI and FDI on China's environmental quality are distinguished and separately estimated for the first time with a carefully designed framework of a two-equation model. Because most economic activities and environmental pollutions occur in the urban areas, a panel data of 112 Chinese cities for the period 2002–2015 is utilized. Several spatial factors are also introduced to control for the potential spatial correlations in economic development and pollutant emissions. The estimation results indicate that there exist apparent differences in the environmental effects of FAI and FDI. The direct effects of FAI on SO2 emissions are significant positive and dominate the negative indirect effects. By contrast, the direct, indirect and total effects of FDI on pollutant emissions are all negative. Therefore, overall speaking, well designed and targeted policies should be formulated to reduce the negative environmental impacts of FAI and to increase the positive influences of FDI on environment. - Highlights: • Influences of domestic and foreign investment on environmental quality in China are investigated. • City-level panel data of fixed asset investment (FAI) and foreign direct investment (FDI) are used. • Spatial correlations in economic development and pollutant emissions are controlled for. • The positive direct effects of FAI on SO2 emissions dominate the negative indirect effects. • The direct, indirect and total effects of FDI on both pollutant emissions are all negative.
[en] This research examines the effect of air quality regulations on the productivity of US power plants based on both economic and environmental outputs. Using data envelopment analysis (DEA) to estimate an efficiency measure incorporating both economic and environmental outcomes, we look at changes in efficiency in US power plants over an eleven-year time period (1994-2004) during which several different regulations were implemented for the control of nitrogen oxides (NOx) and sulfur dioxide (SO2). The paper then models how estimated efficiency behaves over time as a function of regulatory changes. Findings suggest mixed effects of regulations on power plant efficiency when pollution abatement and electricity generation are both included as outputs.