Climate change mitigation and air pollution control are timely and important challenges that are strongly intertwined. Climate change mitigation efforts often bring along co-benefits such as local air quality improvement. Nevertheless, while some policy instruments tackle both objectives at the same time, others entail trade-offs between the two.  A well-coordinated set of interacting technologies and policies is necessary to foster the supply of both local air pollution control and climate change mitigation and allow leveraging synergies while avoiding inconsistencies and complementary effects. Identifying such a coordinated set of appropriate policy instruments for China and Germany/EU based on an integrated economic analysis is the overarching objective of the project "Integrated economic analysis of climate change protection and local air pollution” (INTEGRATE).

To receive reliable project results, several state-of-the art empirical methods are applied. This allows to assess the synergies and trade-offs between climate change mitigation and air pollution control in the context of the energy transition. Consequentially, the optimal mix of policy measures to address interrelationships between climate change mitigation and local air pollution is identified. However, understanding firm behavior and consumer responses to environmental policy is crucial for the effectiveness of these policy measures. Based on microeconometric analyses of firm data, the interrelationship between firm behavior and environmental regulation is evaluated, especially in the context of international trade. Based on an experimental assessment, behavioral channels and incentives are identified that drive the adoption of green technologies or behavior and the stimulation of private (impure) public good provision.