Effectiveness and cost of air pollution control in China
China’s 11th Five-Year Plan set a goal to reduce the emission of sulphur dioxide (SO2) by 10% between 2006 and 2010. Stoerk provides the first empirical evaluation of this target. Using independent NASA satellite data to measure SO2 pollution, Stoerk finds that the target was met: China reduced its SO2 emissions by 11% over the span of five years. By analysing compliance over time, Stoerk shows that one of the likely mechanisms that allowed the policy to work is appropriate SO2 emissions monitoring: monitoring and compliance seem to go hand in hand. Stoerk finds that between 2006 and 2008, before reliable emissions monitoring began in China, provincial governments strongly adjusted their rhetoric around air pollution: a one-standard deviation increase in provinces’ SO2 reduction target led to a 30% increase in political statements on air pollution, mainly driven by mentions of sulphur. The research further quantifies the cost of SO2 abatement across China to assess whether a different implementation of the target would have lowered the abatement cost. At the margin, Stoerk finds that a market-based emissions trading scheme would have lowered the abatement cost by 50%. Stoerk finds that a market-based emissions trading scheme would have lowered the abatement cost by 25% on average, and by 50% for the marginal unit.
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