China’s emissions trading scheme in PM2.5 reduction: a meteorology-based hybrid model

Implementing appropriate environmental economics and policies has become challenging as the global haze problem has become increasingly serious. China is one of the largest emitters of carbon in the world, necessitating the rapid development and improvement in its policies to address haze pollution national. The impact of the emissions trading scheme (ETS) on pollution caused by particulate matter in the air with a diameter of 2.5 µm or less (PM2.5) in China has been studied; however, the seasonal meteorological factors affecting PM2.5 concentrations remain largely underexplored. Therefore, this study estimated how the ETS policy reduced PM2.5 pollution using a difference-in-differences model. This study used the convergent cross-mapping method to analyse the causal relationships among the PM2.5 concentration and meteorological factors in all four seasons. The empirical results showed that China’s ETS policy substantially reduced PM2.5 concentration in 37 pilot cities by 10.9% on average. A causal relationship was found between PM2.5 concentration and various meteorological factors. In addition, the effect of the ETS regime on reducing emissions strongly correlated with urban meteorological conditions and showed seasonal differences. This study provides specific guidelines for implementing national environmental policies in China and other developing countries.