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ID180182
Title ProperImpacts of the desulfurization price subsidy policy on SO2 reduction
Other Title InformationEvidence from China's coal-fired power plants
LanguageENG
AuthorAi, Hongshan
Summary / Abstract (Note)Administrative and order-based environmental regulation policies have always been the main means of pollution control by the government. While, their effects are difficult to assess. The Chinese government implemented a desulfurization subsidy policy for on-grid tariffs, which was implemented in two phases (phase 1: 2004 to 2006; phase 2: since 2007). Considering the dynamic characteristics of the policy, this study adopted three empirical strategies, including difference-in-differences (DID) and pseudo DID method, to verify the causal relationship between the policy and SO2 reduction in China's coal-fired power plants. The results show that there is a clear causal relationship between the policy and SO2 emission reduction. Moreover, the dynamic effect of the desulfurization price subsidy policy has shown an increasing annual trend. The desulfurization price subsidy has effectively motivated enterprises to implement desulfurization facilities, meaning that the capacity for desulfurization and the associated operating costs have been significantly improved. In addition, heterogeneity shows that the desulfurization price subsidy policy performs better in higher marketization and underdeveloped regions. Thus, the Chinese government should strengthen the implementation of electricity price subsidies for desulfurization, and pay attention to the effect and duration of the policy in the process of implementation.
`In' analytical NoteEnergy Policy Vol. 157; Oct 2021: p.112477
Journal SourceEnergy Policy 2021-10 157
Key WordsChina ;  SO2 Emissions ;  DID ;  Desulfurization Price Subsidy Policy ;  Pseudo