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

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  • Cao, Jing
  • Gong, Yazhen
  • Liu, Qingfeng

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.

Suggested Citation

  • Cao, Jing & Gong, Yazhen & Liu, Qingfeng, 2025. "Coordinating climate mitigation and pollution control policies: Insights from China's SO2 reduction mandates," Energy Economics, Elsevier, vol. 144(C).
    • Handle: RePEc:eee:eneeco:v:144:y:2025:i:c:s014098832500194x
    DOI: 10.1016/j.eneco.2025.108370
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