Reducing Sulfur Dioxide and Boosting Agricultural Productivity: Evidence From China's Sulfur Dioxide Trading Pilot

ABSTRACT Food security is one of the key elements in guaranteeing agricultural productivity and promoting sustainable urban development. Some scholars have pointed out that environmental regulations can disrupt the natural deposition of elements in the atmosphere affecting soil nutrients and, consequently, agricultural productivity. Does this argument apply to countries with more severe pollution control, population pressure, and food security challenges? This study, using the 2007 China sulfur dioxide emission trading as a starting point, reveals the relationship between SDE (Sulfur Dioxide Emissions Trading) and agricultural productivity. The analysis yields the following results: First, SDE can suppress agricultural productivity. Second, the use of organic fertilizers, chemical fertilizers, and mechanized agriculture can mitigate the negative effects of SDE. Reductions in industrial sulfur dioxide emissions represent a potential pathway for mitigating SDE. Third, SDE has a greater negative impact on the output of cotton‐growing areas, non‐rice‐producing areas, and non‐fruit‐producing areas. Lastly, SDE inhibits local urban agricultural productivity while promoting agricultural productivity in neighboring cities. This study provides new guidance for the reform of atmospheric environmental regulations and the promotion of food security in China and other developing countries.