Uncovering the strategies of green development in a Chinese province driven by reallocating the emission caps of multiple pollutants among industries.

This study aims to address the question of reallocating emissions caps on CO2 and four common pollutants (COD, NH3-N, SO2, and NOx) among all the industries to facilitate regional green development. We developed a model by considering emissions caps, economic growth, inter-sector linkage, and the smoothness of industrial structure change comprehensively. The model is applied to the Zhejiang Province, a typical Chinese coastal area that has high level of industrialization but severe environmental issues. By integrating multi-criteria decision analysis, input-output table, and scenario analysis, the model uncovers key sectors with relatively high sensitivity to the reallocation of emission caps, and reasonable solutions for emission caps reallocation among all industries are proposed. The results also indicate the spillover of pollutant emissions will be a crucial issue for some industries. The uncertainty in the model is quantified using a Monte Carlo simulation and the results indicate that industrial re-structuring, economic targets, and emission intensity were the most decisive factors to fulfill the emission caps control in the Zhejiang Province. The sensitivity analysis results implied that the key sectors which need to be significantly adjusted on emissions quotas remain the same in most cases. Finally, the policy implications of the study are explored.