Can China’s Carbon Emissions Trading Rights Mechanism Transform its Manufacturing Industry? Based on the Perspective of Enterprise Behavior

Dai, Yue; Li, Nan; Gu, Rong; Zhu, Xiaodong

doi:10.3390/su10072421

Cited by 30 publications

(17 citation statements)

References 39 publications

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“…Dong et al (2019) compared the effect of pilot ETS with the command-andcontrol regime in the "Eleventh Five-year Plan" (2006)(2007)(2008)(2009)(2010) and noted that emission reduction achieved during this period was contributed by tight control measures that included throttling of power supply. Dai et al (2018) analyzed firm-level data in 2011-2015 and found remnants of this behavior, in that the productivity of state-owned enterprises was reduced and ETS trading volume was not as high as anticipated. They concluded that state-owned enterprises bore the burden of compliance cost without effectuating competitiveness boosting measures in the early phase of pilot ETS.…”

Section: Impact On Firmsmentioning

confidence: 95%

Impacts of Carbon Pricing on Developing Economies

Koh

Johari²,

Shuib³

et al. 2021

IJEEP

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Carbon pricing is widely recognized as an effective policy instrument for climate change mitigation. Carbon pricing have been imposed in 39 developed countries and eight middle-income countries. Eight more middle-income countries are considering its implementation. As experiences from industrialized countries may not be relevant to developing countries, this literature review fills a knowledge gap by collating the impacts of carbon pricing in developing economies to facilitate cross-learning. Some developing countries still have distortionary subsidies in place, while others are going through environmental fiscal reforms to nudge their societies and economies towards greenhouse gases emission reduction. Various studies demonstrated that safeguards introduced with carbon pricing could help firms to transition while maintaining the motivation to innovate to stay competitive. At the household level, given different energy consumption patterns, carbon pricing in developing economies is not necessarily regressive, especially for rural population. Aggregate impacts to employment rate and gross domestic product change over time as the economy restructures towards decarbonization. A well-designed carbon pricing policy package with revenue recycling mechanisms tailored to the socioeconomic circumstances of the country could achieve multiple dividends of economic growth, increased employment, improved equality, national debt reduction or accomplishment of other sustainable development goals.

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Section: Impact On Firmsmentioning

confidence: 95%

Impacts of Carbon Pricing on Developing Economies

Koh

Johari²,

Shuib³

et al. 2021

IJEEP

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“…Yin et al [35] show that the EU carbon trading price and air quality index have a direct effect on China's carbon trading price. Dai et al [36] find that China's Carbon emissions trading rights mechanism does not transform its manufacturing industry, based on the Perspective of Enterprise Behavior. Our results provide theoretical evidence for government, enterprises, financial organizations, and investors to determine a risk aversion strategy and maintain the stable development of the carbon financial market.…”

Section: Literature Reviewmentioning

confidence: 99%

Modeling the Risk of Extreme Value Dependence in Chinese Regional Carbon Emission Markets

Qiu

Yang

et al. 2020

Sustainability

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In this study, we analyze the risk of extreme value dependence in Chinese regional carbon emission markets. After filtering the daily return data of six carbon markets in China using a generalized autoregressive conditional heteroscedasticity (GARCH) model, we obtain the standardized residual series. Next, the dependence structures in the markets are captured by the Copula function and the Extreme Value theory (EVT). We report high peaks, heavy tails and fluctuation aggregation in the logarithm return series of the markets, as well as significant dependent structures. There are significant extreme value risks in Chinese regional carbon markets, but the risks can be mitigated through appropriate portfolio diversification.

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“…Equation (7) represents the objectives of maximizing employment and minimizing the total pollution control cost, respectively. Equations (8) to (9) are the constraints of the double-objective optimization model. Equation (8) means that the total pollutant emission minus the total pollutant abatement quantity in a certain region shall not exceed the environmental capacity of the region (i.e.…”

Section: Classification Of Regions Into Sellers and Buyers Of Emissiomentioning

confidence: 99%

“…Various countries take different measures to control air pollution; they include direct control, environment protection tax [6,7], emission trading [8][9][10], and environmental protection technologies such as recycling and reuse [11,12]. Of these options, air pollution control based on emission rights trading has attracted more attention [13,14].…”

Section: Introductionmentioning

confidence: 99%

“…Dales [15] first proposed the concept of emission trading for pollution, property, and prices. Since then, researchers have shown that the implementation of a carbon emission trading mechanism can achieve significant emission reductions [8]. Moreover, Lin and Jia [16] found that establishing and subsequently improving the emission trading mechanism is an important way to cope with environmental change.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

A Joint Control Model Based on Emission Rights Futures Trading for Regional Air Pollution That Accounts for the Impacts on Employment

et al. 2019

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To reduce air pollutant control costs and solve the problem of decreased employment caused by air pollution control, we established a double-objective optimization Joint Control Model (JCM) based on emission rights futures trading. The JCM calculates the spot price of emission rights, classifies regions in the trading market for emission rights into buyers and sellers, and calculates the optimal cooperative pollution abatement quantity. Compared with a non-cooperative control mode, the JCM generated benefits of US$2485.19 × 10 6 . We then used a Game Quadratic Programming (GQP) method to distribute the benefits, and applied the JCM to a case study of the abatement of sulfur dioxide in China's Shanxi, Henan, and Shaanxi provinces. We found that: (i) Compared with a JCM that does not account for employment, employment under the JCM increased by 3.20 × 10 3 people, and the pollution control cost decreased by US$11.20 × 10 6 under the JCM that considered employment. The effect of the latter model is better than that of the former. (ii) Employment under the JCM increased by 18.80 × 10 4 people compared with that under a territorial control mode, reducing the cost by US$99.73 × 10 6 . The JCM is helpful for all participating regions to balance environmental and livelihood issues in the process of air pollution control to achieve sustainable development.

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Can China’s Carbon Emissions Trading Rights Mechanism Transform its Manufacturing Industry? Based on the Perspective of Enterprise Behavior

Cited by 30 publications

References 39 publications

Impacts of Carbon Pricing on Developing Economies

Impacts of Carbon Pricing on Developing Economies

Modeling the Risk of Extreme Value Dependence in Chinese Regional Carbon Emission Markets

A Joint Control Model Based on Emission Rights Futures Trading for Regional Air Pollution That Accounts for the Impacts on Employment

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