Can pollution charges reform promote industrial SO₂ emissions reduction?—Evidence from 189 China’s cities

Abstract

This paper evaluates the real effects of pollution charges reform on [Formula: see text] emissions at the city level. Using the establishment of Comprehensive Work Plan for Energy Conservation and Emission Reduction (The Plan) in China as a quasi-natural experiment, our difference-in-differences estimation shows that: (1) increasing pollution charges has a significant and positive effect on controlling industrial waste [Formula: see text], and this relationship is robust to different specifications and alternative measures; (2) [Formula: see text] emissions can be reduced to achieve reduction targets by forcing companies to strengthen the degree of process production controls and end-of-pipe treatment; (3) eastern and western cities have a better pollution control effect than the other regions, and large cities have better emission reduction effects than smaller cities. Overall, this paper sorts out the evolution of China’s pollution charge policy, and reveals the mechanisms behind the real effects of pollution charges reform on [Formula: see text] emissions, thus providing timely implications for policymakers concerned with environmental protection.