Impact of the implementation of carbon emission trading on corporate financial performance: Evidence from listed companies in China

Liu, Meijuan; Zhou, Chang-Fa; Lü, Feifei; Xiao-han, HU

doi:10.1371/journal.pone.0253460

Cited by 19 publications

(9 citation statements)

References 52 publications

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“…First, carbon emissions trading may bring additional benefits to firms. Liu et al (2021) show that carbon emissions trading policies increase the non-operating income of firms included in carbon emission controls. Meanwhile, existing studies find that carbon emissions trading may increase corporate total factor productivity (Peng et al, 2021), and improve their financial position and cash flow (Abrell et al, 2008;Oestreich and Tsiakas, 2015).…”

Section: Theoretical Analysis and Research Hypothesismentioning

confidence: 98%

Does the Carbon Emissions Trading Policy Increase Corporate Tax Avoidance? Evidence from China

Feng

Zhu

et al. 2022

Front. Energy Res.

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Based on the natural experiment of carbon emissions trading pilots in China, this paper investigates the effect of environmental regulation on corporate tax avoidance. The results show that: 1) Market-incentivized environmental regulation significantly increase the level of corporate tax avoidance. 2) Heterogeneity analysis shows that the effect is more obvious on the non-state-owned firms, firms with severe financing constraints, and firms in highly competitive industries. 3) We find that the reduction of cash flow is the channel for environmental regulation to affect corporate tax avoidance. 4) Further analysis shows that government subsidies can alleviate the enhancement of tax avoidance by environmental regulation. The more government subsidies a company receives, the less tax avoidance it has.

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Section: Theoretical Analysis and Research Hypothesismentioning

confidence: 98%

Does the Carbon Emissions Trading Policy Increase Corporate Tax Avoidance? Evidence from China

Feng

Zhu

et al. 2022

Front. Energy Res.

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“…More and more countries, organizations, and enterprises are realizing the value embedded in CO 2 emissions rights. A CO 2 trading market based on allowances has gradually developed, giving rise to CO 2 emissions rights futures, options trading, and other financial products [38]. The ecological justice theory emphasizes the need for CO 2 emissions behavior to be organically integrated with social justice, working to unlock the international climate dilemma of collective action [39,40].…”

Section: Literature Review and Study Frameworkmentioning

confidence: 99%

Horizontal CO2 Compensation in the Yangtze River Delta Based on CO2 Footprints and CO2 Emissions Efficiency

Wang

Zhang

Zhao

et al. 2023

IJERPH

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Purpose: In this study, we attempted to reduce the negative economic externalities related to Carbon Dioxide (CO2) emissions in the Yangtze River Delta region (YRD) and designed a cross-municipality responsibility-sharing mechanism. Methods: We estimated the municipal CO2 footprints in the YRD from 2000 to 2019 based on nighttime light data and measured CO2 emissions efficiency using a super slack-based measurement (super-SBM) model. Based on this, we designed a scenario of horizontal CO2 compensation among the YRD’s municipalities from the perspectives of both CO2 footprints and CO2 trading (CO2 unit prices in trading were determined based on CO2 emissions efficiency). Results: The results showed the following: (1) The CO2 footprints evolution of the YRD municipalities could be divided into four categories, among which, eleven municipalities showed a decreasing trend. Thirteen municipalities stabilized their CO2 footprints. Thirteen municipalities exhibited strong growth in their CO2 footprints, whereas four municipalities maintained a low level of slow growth. (2) Spatially, CO2 emissions efficiency evolved from a broad distribution of low values to a mosaic distribution of multi-type zones. (3) After 2011, the ratio of CO2 footprint compensation amounts to local Gross Domestic Product (GDP) in most municipalities was less than 0.01%, with its center of gravity shifting cyclically. It was appropriate to start charging the CO2 footprint compensation amounts after 2011, with a dynamic adjustment of 3 years. (4) After 2007, the supply–demand relationship of CO2 trading continued to deteriorate, and it eased in 2016. However, its operational mechanism was still very fragile and highly dependent on a few pioneering municipalities. Innovations: In this study, we designed a horizontal CO2 compensation mechanism from the binary perspective of CO2 footprints and CO2 trading. In this mechanism, the former determines the CO2 footprint compensation amounts paid by each municipality based on whether the CO2 footprint exceeds its CO2 allowance. The latter determines the CO2 trading compensation amounts paid by the purchasing municipalities based on their CO2 emissions efficiency. This system balances equity and efficiency and provides new ideas for horizontal CO2 compensation.

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“…For example, Liu et al (2021) showed that the implementation of carbon emission trading reduced the value of the current capital market. However, other studies have shown that the CET policy will enhance an enterprise's market value [4]. As carbon emission permits are freely allocated, the sale of the remaining permits could be accounted for by higher cash flows due to free permits, which would increase the market value of enterprises [5,6].…”

Section: Introductionmentioning

confidence: 98%

Effects of Carbon Emission Trading on Companies’ Market Value: Evidence from Listed Companies in China

et al. 2022

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Emissions trading schemes (ETSs) are effective measures that facilitate economic growth and carbon mitigation, especially for developing countries such as China. These schemes can further affect the cash flow, production, and investment decisions of regulated companies. However, few empirical studies have explored how ETSs promote companies’ market value. We systematically evaluate the influence of the carbon emission trading (CET) policy on companies’ market value and explore the influential mechanism. We use the data of listed companies from the Chinese stock “A” markets and employ the difference-in-difference method to account for the unobserved cause of the CET policy regarding companies’ market value. Robust benchmark regression results reveal that the CET policy promotes companies’ market value significantly. The mechanism analysis reveals that the CET policy can improve the market value of listed companies by influencing the carbon price, innovative activities, and carbon disclosure. The results of the heterogeneity analysis show that the CET policy’s impact on companies’ market value is heterogeneous in terms of marketization degree, industry, firm ownership, and different regions. We suggest that the carbon pricing mechanism, degree of market perfection, carbon disclosure policy, and carbon finance should be optimized to improve the efficiency of ETSs.

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Impact of the implementation of carbon emission trading on corporate financial performance: Evidence from listed companies in China

Cited by 19 publications

References 52 publications

Does the Carbon Emissions Trading Policy Increase Corporate Tax Avoidance? Evidence from China

Does the Carbon Emissions Trading Policy Increase Corporate Tax Avoidance? Evidence from China

Horizontal CO2 Compensation in the Yangtze River Delta Based on CO2 Footprints and CO2 Emissions Efficiency

Effects of Carbon Emission Trading on Companies’ Market Value: Evidence from Listed Companies in China

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