Written by Valerie Karplus, an Assistant Professor in the Global Economics and Management Group at the MIT Sloan School of Management and the Director of the MIT-Tsinghua China Energy and Climate Project, this paper examines China’s current approach to tackling air pollution and carbon mitigation nationally and argues that more incentives are needed if China hopes to meet its “peak carbon” goal by 2030.

The urgency with which Beijing is tackling air pollution is certainly positive, and such actions will lead to concomitant benefits in curtailing carbon dioxide (CO₂) emissions, to a certain extent. But Karplus argues that it would be a mistake to view the current initiatives on air pollution, which are primarily aimed at scrubbing coal-related pollutants or reducing coal use, as perfectly aligned with carbon reduction.

This is not the case, according to Karplus. Air pollution reduction is only partly aligned with CO₂ reduction, and vice versa. In addition to air pollution efforts, effective co-control requires a more significant step: a meaningful price on carbon. This is especially so if Beijing is to realize its 2030 pledge. Put another way, air pollution control efforts, while essential, will only take China part of the way toward its stated carbon reduction goals.

One major reason is because while low-cost solutions for air pollution and carbon reduction can overlap, the reality is that co-benefits run out after low-cost opportunities to reduce or displace the fuels responsible for both carbon and air pollution emissions—mostly coal in China’s case—are exhausted. In other words, co-benefits diminish over time as greater reductions are needed, according to Karplus.

This paper originally appeared as part of the Paulson Papers on Energy and Environment series.

© 2015 The Paulson Institute