Cooperative econometric model for regional air pollution control with the additional goal of promoting employment

Air pollution has become the focus of attention in many countries around the world. In recent years, China has issued a series of strict air pollution control policies. However, these policies have led to many negative externalities, including adverse effects on employment. With the goal of promoting employment, the present study proposed a cooperative econometric model of regional air pollution control. First, a bi-objective optimization model was built to maximize regional employment and minimize regional control costs. Next, to promote cooperative pollution control among the provinces in the study region, the minimum cost-remaining savings method was applied to build a regional cooperation model for benefit allocation. To illustrate the model, it was applied to SO2 pollution control in China's Beijing-Tianjin-Hebei region as an empirical example based on data from 2015. Compared with the current system (separate control of air pollution), the cooperative econometric model of regional air pollution increased employment by 1.339 × 106 persons (by 3.1%). At the same time, the total comprehensive control cost for air pollution decreased by US$23.73 × 106, thereby decreasing the comprehensive cost of pollution control by 9.6%. Through the benefit allocation model, the comprehensive control cost savings were US$11.88 × 106 for Beijing, US$10.14 × 106 for Tianjin, and US$1.71 × 106 for Hebei. Sensitivity analysis was performed to validate the cooperative econometric model. This demonstrated that the model was effective, stable, and practical. The present results can therefore provide an important reference to support regional decision-making, while promoting cooperation and win-win for participants.