Does China's carbon emission trading reduce carbon emissions? Evidence from listed firms

Shen, Jun; Tang, Pengcheng; Zeng, Hao

doi:10.1016/j.esd.2020.09.007

Cited by 104 publications

(22 citation statements)

References 37 publications

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“…Zhang et al (2019a) estimated the net dynamic impact of China's ETS on low-carbon development in terms of CO2 emissions, carbon intensity, energy consumption and energy intensity, and the results showed that the impact of ETS policy on low-carbon development would gradually increase over time. Similar studies include Wen et al (2020), Zhang et al (2019b) and Shen et al (2020) which find basically consistent conclusions. Overall, those studies generally confirm the positive effect of emission trading on carbon reduction.…”

Section: Literature Reviewsupporting

confidence: 75%

Does Emission Trading Improve Carbon Emission Efficiency of China’s Iron and Steel Industry? An Exploration Using a DEA-SBM and Difference-In-Differences Approach

Wang

2021

Preprint

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As an effective tool of carbon emission reduction, emission trading has been widely used in many countries. Since 2013, China implemented carbon emission trading in seven provinces and cities, with iron and steel industry included in the first batch of pilot industries. This study attempts to explore the policy effect of emission trading on iron and steel industry in order to provide data and theoretical support for the low-carbon development of iron and steel industry as well as the optimization of carbon market. With panel data of China’s 29 provinces from 2006 to 2017, this study adopted a DEA-SBM model to measure carbon emission efficiency of China’s iron and steel industry (CEI) and a difference-in-differences (DID) method to explore the impact of emission trading on CEI. Moreover, regional heterogeneity and influencing mechanisms were further investigated, respectively. The results indicate that: (1) China's emission trading has a significant and sustained effect on carbon abatement of iron and steel industry, increasing the annual average CEI by 12.6% in pilot provinces. (2) The policy effects are heterogeneous across diverse regions. Higher impacts are found in the western and eastern regions, whereas the central region is not significant. (3) Emission trading improves CEI by stimulating technology innovation, reducing energy intensity, and adjusting energy structure. (4) Economic level and industrial structure are negatively related to CEI, while environmental governance and openness degree have no obvious impacts. Finally, according to the results and conclusions, some specific suggestions are proposed.

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Section: Literature Reviewsupporting

confidence: 75%

Does Emission Trading Improve Carbon Emission Efficiency of China’s Iron and Steel Industry? An Exploration Using a DEA-SBM and Difference-In-Differences Approach

Wang

2021

Preprint

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“…Cao et al simulate the distribution of atmospheric co-pollutants and discussed the different public health with and without the ETS [23]. Shen et al used the PSM-DID model to reveal the carbon emission reduction effect driven by ETS [24]. Their results showed that ETS made a reduction of 129.588 million tons' carbon emissions, while the effect attenuates over time.…”

Section: Summary Of Emission Reduction Effect Of Carbon Emission Trading Schemementioning

confidence: 99%

Synergistic Effect of Carbon Trading Scheme on Carbon Dioxide and Atmospheric Pollutants

Wang

Che

2021

Sustainability

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To estimate the synergistic emission reduction effect resulting from carbon emissions trading scheme (ETS) pilots launched in 2013, this study estimated the synergistic emission reduction relationship between carbon dioxide (CO2) and atmospheric pollutants, consisting of sulfur dioxide (SO2), nitrogen oxides (NOX), dust pollutants (Dust) and particulate matter 2.5 (PM2.5). Using the extended logarithmic mean Divisia index (LMDI) method and the IPAT equation, the synergistic emission reduction effect was decomposed into direct and indirect categories driven by energy efficiency, economic development and industrial structure. Moreover, the synergistic emission reduction effect of ETS pilots was quantified with the difference-in-differences method (DID) and propensity score matching difference-in-differences method (PSM-DID). The results show that, from 2013 to 2016, CO2 and atmospheric pollutants achieved emission reduction synergistically through ETS, among which the synergistic emission reduction effect between CO2 and SO2 was most significant. Compared with the direct category, the indirect category accounted for smaller proportion of the synergistic emission reduction effect. The combined action of energy efficiency and industrial structure has a potential positive influence on synergistic emission reduction effect of ETS. Consequently, this suggests that the government needs to develop the domestic carbon market further, improve energy efficiency and optimize industrial structure to promote synergistic emission reduction.

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“…First, enterprises eliminate backward production capacity under cost pressure and propel the flow of production factors to enterprises in technology intensive industries, so as to adjust the economic structure and alleviate carbon emissions [ 64 , 65 ]. Secondly, under the cost pressure and the driving force of emission reduction technology innovation, enterprises tend to improve emission reduction technology to advance energy efficiency and finally achieve the goal of energy conservation and emission reduction [ 66 , 67 ].…”

Section: Discussionmentioning

confidence: 99%

The Energy Saving and Emission Reduction Effect of Carbon Trading Pilot Policy in China: Evidence from a Quasi-Natural Experiment

Zhang

2022

IJERPH

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Promoting the carbon emission trading system has been a crucial measure for China to fulfill its carbon neutrality commitment. Taking the carbon emission trading system implemented in China in 2013 as a quasi-natural experiment, based on the provincial panel data of China from 2005 to 2019, this paper adopts the difference-in-difference (DID) method and the synthetic control method (SCM) to evaluate the impact of the carbon emission trading system on energy conservation and emission reduction in pilot provinces and cities. The research findings reveal that, on the whole, the carbon emission trading system has significantly promoted the process of energy conservation and emission reduction in pilot provinces and cities. Other robustness tests, including the parallel trend test, PSM–DID stationarity test and placebo test have also been passed. Heterogeneity analysis shows that the most significant policy effects occur in Tianjin and Shanghai, followed by Hubei. The emission reduction effect of Guangdong displays a trend of first decreasing and then increasing. The test results demonstrate that the carbon emission trading system can strengthen the process of energy conservation and emission reduction by optimizing the industrial structure and energy structure. In conclusion, policy makers should coordinate the relationship between the government and the market and speed up the transformation of environmental policy from command control type to market incentive type. Meanwhile, improve the property right system and accelerate the promotion of carbon emission trading pilot policies in China according to local conditions. By encouraging technological innovation, a new market-oriented path of energy conservation and emission reduction guided by the enhancement of energy efficiency and the optimization of energy and industrial structures ought to be formed.

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Does China's carbon emission trading reduce carbon emissions? Evidence from listed firms

Cited by 104 publications

References 37 publications

Does Emission Trading Improve Carbon Emission Efficiency of China’s Iron and Steel Industry? An Exploration Using a DEA-SBM and Difference-In-Differences Approach

Does Emission Trading Improve Carbon Emission Efficiency of China’s Iron and Steel Industry? An Exploration Using a DEA-SBM and Difference-In-Differences Approach

Synergistic Effect of Carbon Trading Scheme on Carbon Dioxide and Atmospheric Pollutants

The Energy Saving and Emission Reduction Effect of Carbon Trading Pilot Policy in China: Evidence from a Quasi-Natural Experiment

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