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Open AccessArticle

Pollution Emissions, Environmental Policy, and Marginal Abatement Costs

College of Economics and Management, China Agricultural University, Beijing 100083, China
Institute of Resource, Environment & Sustainable Development Research, School of Economics, Jinan University, Guangzhou 510632, China
School of Economics and Management, Nanjing University of Information Science and Technology, Nanjing 210044, China
Author to whom correspondence should be addressed.
Int. J. Environ. Res. Public Health 2017, 14(12), 1509;
Received: 23 October 2017 / Revised: 23 November 2017 / Accepted: 2 December 2017 / Published: 5 December 2017
(This article belongs to the Special Issue Economic Evaluation of Environmental Policies and Interventions)
Pollution emissions impose serious social negative externalities, especially in terms of public health. To reduce pollution emissions cost-effectively, the marginal abatement costs (MACs) of pollution emissions must be determined. Since the industrial sectors are the essential pillars of China’s economic growth, as well as leading energy consumers and sulfur dioxide (SO2) emitters, estimating MACs of SO2 emissions at the industrial level can provide valuable information for all abatement efforts. This paper tries to address the critical and essential issue in pollution abatement: How do we determine the MACs of pollution emissions in China? This paper first quantifies the SO2 emission contribution of different industrial sectors in the Chinese economy by an Input-Output method and then estimates MACs of SO2 for industrial sectors at the national level, provincial level, and sectoral level by the shadow price theory. Our results show that six sectors (e.g., the Mining and Washing of Coal sector) should be covered in the Chinese pollution emission trading system. We have also found that the lowest SO2 shadow price is 2000 Yuan/ton at the national level, and that shadow prices should be set differently at the provincial level. Our empirical study has several important policy implications, e.g., the estimated MACs may be used as a pricing benchmark through emission allowance allocation. In this paper, the MACs of industrial sectors are calculated from the national, provincial and sectoral levels; therefore, we provide an efficient framework to track the complex relationship between sectors and provinces. View Full-Text
Keywords: SO2 emissions; marginal abatement costs; shadow prices SO2 emissions; marginal abatement costs; shadow prices
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He, L.-Y.; Ou, J.-J. Pollution Emissions, Environmental Policy, and Marginal Abatement Costs. Int. J. Environ. Res. Public Health 2017, 14, 1509.

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