This article describes a multidisciplinary study of market-based policies for controlling air pollution in China. While previous studies have examined the costs and benefits of pollution control separately, this approach determines them together using an economy–environment model for China. We employ air dispersion simulations and population maps to calculate health damages due to air pollution. This provides estimates of incremental damages for industry output and fuel use. Based on these marginal damages, we simulate the effect of “green taxes” on the economy and show that the environmental benefits exceed the aggregate costs, ignoring adjustment costs for individual sectors.
The Harvard-China Project adopted an Open Access policy in September 2017. Journal articles that are already made open access by the publishers are available on our publications page as PDF attachments, while the final manuscripts of other articles published since our adoption of the policy are available in the Harvard University open-access repository, DASH, under the Harvard-China Project collection. There is usually a six-month delay after the article is published before its manuscript is uploaded to DASH.