China's rapid economic growth has been accompanied by a high level of environmental degradation. One of the major sources of health and ecosystem damages is sulfur dioxide (SO2). Reducing SO2 emissions is a priority of China's environmental authorities, and the 11th Five-Year Plan (2006--2010)...

This article describes a multidisciplinary study of market-based policies for controlling air pollution in China. While previous studies have examined the costs and benefits of pollution control separately, this approach determines them together using an economy--environment model for China. We...