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As China's environmental governance turn to a high-quality management, establishing reasonable and effective bonus-penalty mechanism is an effective means to promote coordinated emission reduction and improve regional air quality. Therefore, this paper constructs a bi-level programming model with bonus-penalty standards and emission quotas, based on the maximization of social benefits and the minimization of the gap between reward and punishment funds. Given the NP-hard problem of bi-level programming model, this work also designs a nested hierarchical particle swarm optimization (HPSO) algorithm for the above model. Subsequently, from the emission data of SO2 and macroeconomic data in the northeastern region of China from 2006 to 2015, the SO2 emission quota and bonus-penalty standards of each province are calculated. The results demonstrate that (1) the optimal emission quotas of Heilongjiang, Jilin and Liaoning province are 37.7, 30.3 and 69.3 (10,000 tons), respectively. (2) When the compensation fee of pollutant abatement is set at 521.48 yuan/ton and the standard of excess discharge levy is 2977.43 yuan/ton, the effect of pollution control in each province can be effectively improved. The empirical analysis also reveals that the proposed model has a remarkable effect on regional environmental governance. Finally, this paper puts forward some suggestions on the implementation of the bonus-penalty mechanism. • A bi-level programming model with bonus-penalty standards was developed. • This paper provides a new way to solve the same bilevel programming problem. • This paper's simulation focuses on an old industrial area. [ABSTRACT FROM AUTHOR]