Cost-benefit analysis of China’s Action Plan for Air Pollution Prevention and Control

Abstract

China’s rapid economic growth has caused severe air pollution and public health problems. Therefore, the Chinese government launched the National Air Pollution Prevention and Control (hereinafter referred to as the “Air Plan”) in 2013–2017 to improve air quality and safeguard public health. In this study, an analytical framework for a cost-benefit analysis applicable to China was constructed, and the costs and benefits of the implementation of the “Air Plan” in 30 cities and provinces in China from 2013 to 2017 were evaluated. Results show that the total cost of implementation of the “Air Plan” is 1.6511 trillion RMB. The benefits of air quality improvement were determined to be 2.4691 trillion RMB through the willingness-to-pay method to calculate the economic loss of premature deaths. The net benefit related to the implementation of the “Air Plan” was 818 billion RMB. The public health benefit of air quality improvement was 1.5 times the cost of the nationwide implementation of the “Air Plan”. At the provincial level, net benefits that reach 279.3 billion RMB were the highest in Guangdong, whereas the benefit-cost ratio, where the benefit was 5.5 times the cost, was the highest in Fujian. Estimations in this study can serve as a reference for China in formulating similar environmental policies and implementing the “3-year Plan to Defend the Blue Sky”. In addition, these estimations have practical significance for advancing the long-term effective mechanisms of the cost-benefit analysis of China’s environmental policies.

Keywords

Air Plan / cost-benefit analysis / health benefits / environmental policy

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