Is it worth implementing the Blue Sky Defense Battle initiative? A cost-benefit analysis of the Chengdu case.

Abstract

To mitigate air pollution, China began implementing its Three-Year Action Plan for Winning the Blue Sky Defense Battle in 2018. The rapid decline in the annual average concentration of particulate matter PM2.5 raised the authors' interest in the cost efficiency of the implementation of the action plan. Taking Chengdu as an example, this study assesses the costs and benefits of the implementation of the Action Plan by investigating the direct abatement costs, the change of PM2.5-related disease burdens, and the resulting health benefits. The results show that the abatement costs of air pollution in Chengdu amounted to 8.77 billion yuan from 2018 to 2020, the number of beneficiaries over three years could reach 353,546, and the health benefits amounted to 9.79 billion yuan. The health benefit outweighs the abatement cost. Furthermore, among the abatement measures, the cost of transportation infrastructure development accounted for 92.83% in the total. Considering its co-benefit of industry development and CO2 abatement, the true benefits should far outweigh the costs. The Monte Carlo simulation further confirms the economic efficiency of the Three-Year Action Plan. Although the direct costs of the Action Plan are significant, the marginal health benefits of further alleviating PM2.5 may still be greater than the marginal costs, because the population is large and densely distributed in Chengdu. Actions on improving air quality still have the potential to further unlock health benefits for large cities like Chengdu.