Clearer Skies Over China: Reconciling Air Pollution, Climate, and Economic Goals

Endorsements and reviews of the new China Project book from MIT Press, Clearer Skies Over China: Reconciling Air Quality, Climate, and Economic Goals, edited by Chris P. NIELSEN and Mun S. HO with central contributions from ZHAO Yu, LEI Yu, WANG Yuxuan, CAO Jing, and Dale W. JORGENSON: 

"The integrated analytical approach taken in this book is a remarkable effort. This is the clearest and best book I have read on air pollution in China, and the only one to tackle the issue in such an authoritative and comprehensive way. It gives a clear sense of how to put substance on the possibilities and benefits of a low-carbon economy while still pursuing substantial economic growth."
Arthur J. HANSON, International Chief Advisor, China Council on International Cooperation on Environment and Development

"In terms of future directions [of China’s carbon] policy, what could they be? … [M]ost critically, in my view: the introduction of an effective regime of economy-wide carbon pricing. And I ... draw attention to … this book recently produced by Chris Nielsen and Munsing Ho. … [The] impact, and I think utility, of this particular study … is this: [the] carbon tax proposals put forward in this volume [confirm] the overall modest impact on overall consumption, and the modest impact on overall growth, of a carbon tax being applied. … I commend the study to you, and to our Chinese friends in the global policy debate, on how the most effective mitigation measures can be deployed [to] deal with climate change. " (Starting at 44:20 in the video here.)
Kevin RUDD, Former Prime Minister, Australia 

"This book presents the strongest collaboration across the sciences and economics that I’ve seen on the challenges of building protection of air quality and global climate into China’s development. It is also a model international collaboration, one that will elevate understanding of China’s environmental present and future both at home and abroad."
QU Geping, founding administrator, National Environmental Protection Agency of China; past Chairman, Environment and Resources Protection Committee of the National People's Congress

"This book is essential reading for scholars and policymakers interested in controlling air pollution and greenhouse gas emissions in developing countries. It is the first comprehensive treatment of the subject in China and contains all of the elements necessary for conducting similar analyses in other countries."
Maureen CROPPER, Distinguished University Professor, Department of Economics, University of Maryland; past President, Association of Environmental and Resource Economists; past Lead Economist, World Bank

In Clearer Skies Over China, China Project economists, engineers, atmospheric scientists, and health scientists at Harvard, Tsinghua University, Nanjing University, and the Chinese Academy of Environmental Planning have integrated the economics-engineering-health framework developed in Clearing the Air with the Project's GEOS-Chem atmospheric model of China. This long-intended Project integration is possible due to advances in the resolution of national emission inventories by researchers originally from Tsinghua U., who improved inventories and linked them together as Harvard post-docs and now participate in the China Project from home institutions in China. The improved spatial and sector resolution of emission inventories makes the linking of a sector-based economic model and a spatially-resolved atmospheric model feasible. The emission inventory research is described here.

The result is an advance in understanding the full atmospheric and related effects of emission control and energy policies shaping the Chinese economy. This model integration allows the team to better quantify the effects of complex secondary pollutants like ozone and sulfates on public health, agricultural productivity, and the economy, and potentially of black carbon and sulfates on radiative forcing. The multi-disciplinary team first completed assessment of two policies using the newly comprehensive framework, looking backwards to the years 2006-2010 to take advantage of more complete datasets:

          • A carbon tax of 100 yuan/ton of carbon (roughly US$4/ton CO2), in which avoided local pollution and health damages are a co-benefit of GHG control; and

          • The ambitious sulfur control measures of the 11th Five Year Plan (2006-2010), in which effects on carbon emissions are a co-benefit of local pollution control.

This comprehensive framework was then used to evaluate a variety of carbon tax structures in China looking forward to 2013-2020, including:

          • different tax levels;

          • different time-paths of tax implementation;

          • different revenue uses, including lump-sum rebates to consumers, revenue-neutral reductions of distortionary existing taxes, and support for emission-intensive, trade-exposed industries; and

          • different assumptions about carbon prices in the rest of the world.

The new book, Clearer Skies Over China: Reconciling Air Quality, Climate, and Economic Goals, reports results of the scenarios for both 2006-2010 and 2013-2020. The results were also the subject of an op-ed in the Sunday Review of the New York Times by Chris NIELSEN and Mun HO of the China Project. 

This complex collaboration was seed-funded by the Harvard China Fund, and has been generously supported by grants from the Energy Foundation China, a Harvard fund for student and post-doctoral fellowships, the National Science Foundation (ATM-063558 and ATM-1019134) and the Harvard Weatherhead Center for International Affairs. The economics component is now separately supported by an award from the Cheung Yan Fund of the Harvard Department of Economics.

Following the completion of Clearer Skies Over China, the team has been using the framework to assess the costs and benefits of other approaches China is implementing, or considering, to limit its atmospheric emissions. These analyses (funded by the Energy Foundation China) consider policy strategies to reduce local and regional air pollution, specifically:

          • the NOX controls in the 12th Five Year Plan (2011-2015);

          • prospective control of other environmentally potent species, notably ammonia.

The research team has now returned to assessment of tax-based emission control options, based on ongoing, invited consultations with the Research Institute for Fiscal Science of the Chinese Ministry of Finance. These will include:

          • additional carbon tax structures; and
          • other forms of taxes, including on energy resources.

New extensions of the framework include stronger consideration of the fiscal effects of tax-based emission controls, and their role in overall tax reform anticipated in China through 2020. The team is importantly also incorporating a household demand model to allow assessment of the incidence of different tax policies, for instance across different Chinese income classes or across the rural-urban divide.