Can Policy Instruments Achieve Synergies in Mitigating Air Pollution and CO2 Emissions in the Transportation Sector?

Abstract

The transportation sector has significantly contributed to greenhouse gas and air pollutant emissions. Consequently, there is an urgent need to investigate strategies to synergize the reduction in CO2 and pollutant emissions in this sector. Using panel data from 30 provinces in China over the period from 2005 to 2018, this study employs spatial econometric models and mediation effect models to investigate the synergistic effects of carbon markets and environmental regulations on carbon reduction and pollution control in the transportation sector, along with the underlying transmission mechanisms. The results are as follows: (1) Carbon markets can achieve synergistic reduction effects in both CO2 emissions and pollutant emissions, whereas environmental regulations can reduce pollutant emissions alone in the transportation sector. (2) The synergistic reduction effects of carbon markets and environmental regulations in the transportation sector exhibit regional heterogeneity. The central region can realize synergistic reductions, while the western and eastern regions may experience an increase in CO2 and pollutant emissions and cross-regional transfers. (3) Carbon markets can achieve synergistic reduction effects in the transportation sector by influencing the industrial structure at the provincial level, transportation supply and demand at the sectoral level, and green willingness at the individual level.