The Impact of Chinas Acid Rain and Sulfur Dioxide Control Zones Policy on Industrial Sulfur Dioxide Emissions: A Panel Analysis

Abstract

In order to control sulfur dioxide (SO2) emissions, the Chinese government in 1998 implemented the Acid Rain and Sulfur Dioxide Emission Control Zones policy (known as the Two Control Zone or TCZ policy). In a panel analysis of the impact of the TCZ policy on Chinas industrial SO2 emissions, two-way fixed-effects models show that it did not significantly reduce either per capita SO2 emissions or SO2 intensity in China. The study also reveals that instead of the traditional inverted U-shaped Environmental Kuznets Curve, the relationship between income growth and sulfur pollution in China favors an N-shaped pattern. The empirical results indicate that the TCZ policy has not had a consistent, longterm impact on sulfur pollution control. This is in accord with previous studies and the actual situation in the two control zones. This paper presents two policy recommendations for improving the mitigation of SO2 pollution in China.