A comparative assessment of economic-incentive and command-and-control instruments for air pollution and CO2 control in China's iron and steel sector

• Published in: Journal of environmental management 2014-11, Vol.144, p.135-142
• Main Authors: Liu, Zhaoyang, Mao, Xianqiang, Tu, Jianjun, Jaccard, Mark
• Format: Article
• Language: English
• Subjects: Air Pollutants - analysis; Air Pollution - prevention & control; Animal, plant and microbial ecology; Applied ecology; Biological and medical sciences; Carbon Dioxide - analysis; China; China's iron and steel sector; CO2; Conservation, protection and management of environment and wildlife; Ecotoxicology, biological effects of pollution; Emission control instruments; Environmental Policy - economics; Environmental Policy - legislation & jurisprudence; Environmental Restoration and Remediation - economics; Environmental Restoration and Remediation - methods; Fundamental and applied biological sciences. Psychology; General aspects; Integrated assessment model; Local air pollutants; Metallurgy; Models, Economic; Models, Theoretical; Policy Making; Terrestrial environment, soil, air
• ISSN: 0301-4797; 1095-8630
• DOI: 10.1016/j.jenvman.2014.05.031

China's iron and steel sector is faced with increasing pressure to control both local air pollutants and CO2 simultaneously. Additional policy instruments are needed to co-control these emissions in this sector. This study quantitatively evaluates and compares two categories of emission reduction instruments, namely the economic-incentive (EI) instrument of a carbon tax, and the command-and-control (CAC) instrument of mandatory application of end-of-pipe emission control measures for CO2, SO2 and NOx. The comparative evaluation tool is an integrated assessment model, which combines a top-down computable general equilibrium sub-model and a bottom-up technology-based sub-model through a soft-linkage. The simulation results indicate that the carbon tax can co-control multiple pollutants, but the emission reduction rates are limited under the tax rates examined in this study. In comparison, the CAC instruments are found to have excellent effects on controlling different pollutants separately, but not jointly. Such results indicate that no single EI or CAC instrument is overwhelmingly superior. The environmental and economic effectiveness of an instrument highly depends on its specific attributes, and cannot be predicted by the general policy category. These findings highlight the necessity of clearer identification of policy target priorities, and detail-oriented and integrated policy-making among different governmental departments. •A carbon tax and command-and-control (CAC) instruments are evaluated and compared.•The carbon tax co-controls multiple pollutants by limited rates.•The CAC instruments control pollutant separately, but not jointly.•No single category of instruments is superior on all the criteria.•Policy-making for CO2 and local air pollution control should be integrated.