Turning Policy Promises into Blue Skies

High coal consumption resulting from rapid economic growth in China has taken a high toll on Chinese residents' health and China's economy. Many citizens suffer from high rates of air pollution-induced respiratory and cardiovascular illness and premature death. Since the late 1970s, China has been mandating and updating its air pollution reduction policies, many of them targeting emissions from coal burning. These environmental regulations are embedded within a regulatory system with many features of China's former system of central planning. In this system, national regulations, negotiated political agreements, and five-year plans form the basis for the implementation and enforcement of environmental policy. But regulations are often weakly enforced due to poor policy design in which polluters face fines cheaper than compliance costs, and misaligned incentives for government agencies to enforce regulations.

In light of continuing high rates of air pollution, the Chinese government will need to greatly strengthen enforcement if China is to reduce air pollution to the point where the health risks and economic costs of air quality are greatly reduced. Better enforcement would result in deeper reductions in pollution from burning coal. Policy analysis could help guide the Chinese government toward more effective policies. That is the motivation for this research.

In this dissertation I have assessed China's past and current efforts towards preventing and controlling air pollution during a period of rapid economic growth. I first summarized the current status of air quality in China and the costs of pollution imposed on the economy and public health. I then reviewed the institutional and policy designs of China's air pollution regulatory strategies, and identified the key drivers of implementation and enforcement. Finally, using the Pearl River Delta region as a case study, I conducted a mathematical simulation using an integrated assessment model to illustrate the potential effectiveness of the government's proposed Action Plan and consequences of noncompliance.