Energy Costs of Reducing Industrial Sulfur Dioxide Emissions in China

With increasing environmental pollution, China has instituted corresponding environmental regulations to address environmental challenges. Estimating the costs of such environmental regulations can help governments to formulate rational environmental policies. This review estimates the costs of environmental regulations based on a novel perspective of energy consumption. Using panel data for Chinese provincial regions in 2006–2015, we developed a non-parametric directional distance function and estimated different optimal energy inputs based on data envelopment analysis under two scenarios, namely, those with and without emission reduction constraints. The gap between the two groups of optimal energy inputs facilitated the estimation of the energy costs associated with reducing SO2 (sulfur dioxide) emissions in China’s industrial sectors. The results suggest that approximately 13.40 tons of standard coal were required to reduce SO2 emissions by 1 ton, highlighting the discrepancy between energy savings and emission reduction. The energy costs of SO2 emission reduction were the highest in West China (18.63), followed by those in Central and Northeast China; meanwhile, those in East China were the lowest (9.91). The large differences between the energy costs of emission reduction in different regions indicated that economically underdeveloped areas have scope for improvement with respect to energy structures and innovation in the green technology field