Impact of emission regulation policies on Chinese power firms’ reusable environmental investments and sustainable operations

This study investigates the impact of emission regulation policies (i.e., emergency response policy versus long-term protection policy) on the investment levels of reusable environmental facilities (e.g., desulphurization pumps) used by coal-fired power plants in China to improve their sustainable operations. To set up a baseline for further analysis and compare the impact of emission regulation policies, an improved framework for performance evaluation of sustainable operations is developed in this study by integrating classical data envelopment analysis (DEA) and exponential learning curve. The proposed mathematical models are applied into an empirical study of 27 major million-kW coal-fired power plants in mainland China. Empirical analysis shows that the interactions among official emission regulation policies, reusable environmental investment (REI), and sustainable operations management of coal-fired power plants in China. Several policy suggestions are provided for power firm managers and policy makers in China. Specifically, we suggest that the Chinese government should implement long-term protection policies in less developed regions instead of emergency response policies.