Can policies aimed at reducing carbon dioxide emissions help mitigate haze pollution? An empirical analysis of the emissions trading system

Haze pollution is a major cause of serious respiratory health problems, and reducing haze has become increasingly necessary. Additionally, China is the largest carbon emitter worldwide, and the need to improve the country's energy conservation and emission reduction strategies has become increasingly urgent. To reduce CO2 emissions, China launched an emissions trading system (ETS) pilot program in 2011. Whether this system reduces haze pollution remains unclear and is the focus of this paper. Based on data from 31 provinces and autonomous regions in Chinese mainland from 2000 to 2017, using haze pollution as the dependent variable, this paper uses the difference-in-differences (DID) and propensity score matching-difference-in-differences (PSM-DID) approaches to conduct empirical analyses of the effects of the ETS on haze pollution in pilot provinces and their neighboring provinces. The results show the following. (1) In the pilot areas, the estimated coefficient of PSM-DID is - 6.29, indicating that the ETS can alleviate haze pollution in the pilot areas and achieve a win-win situation of controlling haze pollution and promoting CO2 emission reduction. (2) In the provinces adjacent to the pilot areas, the estimated coefficient of PSM-DID is - 1.98. The ETS effectively alleviated local haze pollution, providing a spillover effect. (3) Although the ETS was equally effective in controlling haze pollution in the provinces surrounding the pilot areas, its impact on the particulate matter (PM2.5) concentration in the provinces surrounding the pilot areas was weaker than that in the pilot areas, and there was a certain lag period.

Automated summary

This paper investigates the impact of China's ETS pilot program on haze pollution, finding that the ETS effectively alleviates haze pollution in pilot areas and neighboring provinces. The study shows a win-win situation of controlling haze pollution and promoting CO2 emission reduction in the pilot areas.