Do Carbon Emission Trading Schemes Promote the Green Transition of Enterprises? Evidence from China

Abstract

As one of the environmental governance tools used to achieve green and low-carbon development in China, the ability of carbon emission trading schemes (CETS) to promote the green transition of enterprises is key to assessing the effectiveness of their implementation. Therefore, this paper used the panel data of China A-share listed heavy-polluting enterprises from 2010 to 2019, adopted the super-SBM model and GML index to measure the green total factor productivity (GTFP) of enterprises as an indicator of green transition, and further employed a staggered difference-in-difference model (DID) based on propensity score matching (PSM) to investigate the impact and mechanism of CETS on the green transition of enterprises. The results revealed that CETS significantly improved the green development efficiency of heavy-polluting enterprises and promoted green transition. In addition, the promotion was more pronounced among enterprises with weak cost transfer abilities, low levels of financing constraints, and high-quality internal control systems as well as in areas with high environmental enforcement intensity. More importantly, the mechanism analysis showed that heavy-polluting enterprises mainly chose to increase green technological innovation, especially substantive green technological innovation, and accelerated productive capital renewal to achieve their green transition targets. This study provides empirical evidence for improving the construction of the national carbon emission trading market and promoting the green transition and low-carbon development of heavy-polluting enterprises.

Environmental regulatory intensity, green finance and corporate green sustainable development performance

“…For example, Lanoie finds that environmental regulation does have an incentive effect on innovation, using OECD countries as a research sample [ 25 ]. The carbon emission rights trading system can incentivize green innovation among enterprises in pilot regions, leading to a significant reduction in carbon emissions [ [26] , [27] , [28] ], and can also significantly improve the effectiveness of strongly polluting companies' green development and promote their green transformation [ 29 ]. Another part of the research is dedicated to investigating the influence of environmental regulation on ESG performance, an area that has garnered significant attention, because the ESG indicator evaluation system is dramatically consistent with the connotation of sustainable development.…”

Assessment of green technology innovation on energy-environmental efficiency in China under the influence of environmental regulation considering spatial effects

“…Although GTI brings various beneficial impacts, the specific part of this impact generated by GTI may vary depending on the industry or context 25 . For instance, ER increase the effect of green knowledge innovation on CO 2 reduction 26 , further encouraging heavy-polluting enterprises to preferentially focus on substantial green technology innovation during their green transformation 27 . However, the fundamental reasons behind the generation of these impacts by GTI have not been thoroughly explored.…”

The Impact of Carbon Emission Trading Policy on Enterprise ESG Performance: Evidence from China

“…The transition to the low carbon economy and the carbon trading system is positively correlated with environmental impacts [9]. The carbon emission trading system can significantly improve heavy polluters' green development efficiency and promote their green transformation [10]. In a study by Chen et al, carbon emissions trading was proven to significantly reduce greenhouse gas emissions in both enterprises and provinces [11].…”