Need for Coordination between Greenhouse Gas and Pollution Abatement Regulations: China’s Case and Its Implications for Korea

Abstract

In this chapter, I briefly introduce my previous research on the carbon co-benefits of pollution abatement in China and then discuss what key lessons Korea can learn from it. A main finding is that strong cross effects exist between air pollution and carbon mitigation in China. In particular, China could even over-achieve its official CO2 intensity targets, in terms of carbon reductions, by simply meeting the existing SO2 and NOx reduction goals. Accordingly, the CO2 intensity targets are not binding and generate unnecessary compliance costs. This result conveys several policy implications for Korea. First, local pollution abatement, given its strong cross effects, may be considered as a carbon mitigation strategy. However, taking full advantage of the cross effects—meeting emission reduction targets at minimal costs—requires a close coordination between air pollution and carbon regulations. Finally, clear and consistent long-term reduction goals and associated policy incentives are necessary to promote economy-wide, forward-looking technology adoption and thus to avoid the potential lock-in effect in energy supply.