Abstract: The environmental system and the economic system interact through dynamic feedbacks, with some pollutants exhibiting cross-regional transport and multi-period persistence. This study develops a Regional Environment Economy Dynamic model (REED) that internalizes air pollutant emissions, cross-regional transmission, and health impacts into a long-term economic growth framework. By coupling environmental and economic systems within a dynamic general equilibrium structure, the model seeks optimal abatement pathways that balance development and pollution reduction over time under a cost-benefit principle. The model is calibrated based on air pollution control practices in North China, with policy scenarios designed to reflect real-world emission reduction policies, including central supervision and regional joint prevention and control mechanisms. Simulations yield dynamic optimal abatement rates for each province. The results indicate that under regional cooperation, the optimal abatement rate for North China increases gradually from 3% in the initial year to 5% by 2040, remaining stable thereafter. This pathway allows the region to achieve the PM2.5 target (below 35μg/m3) by 2040. Abatement responsibilities are distributed heterogeneously across provinces, with Hebei bearing a higher burden. Overly stringent targets-such as reducing PM2.5 below 10μg/m3 by 2035-would require an additional 5%-7% annual abatement rate, incurring substantial economic costs and welfare losses.

Key words: environmental-economic systems, dynamic optimization modeling, air pollution, jointly regional pollution control