Coordinating climate mitigation and pollution control policies: Insights from China's SO2 reduction mandates

Jing Cao, Yazhen Gong and Qingfeng Liu

Energy Economics, 2025, vol. 144, issue C

Abstract: Understanding the interaction of pollution control and carbon mitigation is crucial for addressing both air pollution and climate change This paper investigates the carbon-mitigation spillovers of pollution control policies and the underlying firm-level reduction strategies, leveraging prefecture-level variations in policy intensity under China's Eleventh Five-Year Plan. To address endogeneity concerns, the critical sulfur loads—an exogenous-given measure of environmental capacity—are employed as an instrumental variable. The results suggest that stricter SO2 emission constraints generate significant carbon-mitigation spillovers, primarily through firms' source control strategies. These spillovers exhibit a non-linear pattern, intensifying as emission constraints become more stringent. By offering a micro-level and dynamic perspective, the study contributes to the literature on the indirect climate benefits of pollution control and underscores the value of integrating these co-benefits into both local policy design and international climate frameworks.

Keywords: Air pollution mandate; Climate mitigation; Emission reduction strategy; Spillover effect; China (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:144:y:2025:i:c:s014098832500194x

DOI: 10.1016/j.eneco.2025.108370

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