Unintended consequences of cap-and-trade? Evidence from the Regional Greenhouse Gas Initiative

Chan, Nathan W.; Morrow, John

doi:10.1016/j.eneco.2019.01.007

Cited by 43 publications

(21 citation statements)

References 18 publications

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“…Nevertheless, there are some studies evaluating such low‐price schemes. For example, the Regional Greenhouse Gas Initiative (in several northeastern U.S. states) has been evaluated by several studies, showing weak or no effects on emission reductions, partially explained by leakage of electricity generation and emissions to other states (Chan & Morrow, 2019; Fell & Maniloff, 2018; Murray & Maniloff, 2015).…”

Section: Case Selection and Evaluation Frameworkmentioning

confidence: 99%

The effect of carbon pricing on technological change for full energy decarbonization: A review of empirical ex‐post evidence

Lilliestam

Patt

Bersalli

2020

WIREs Climate Change

101

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In order to achieve the temperature goals of the Paris Agreement, the world must reach net‐zero carbon emissions around mid‐century, which calls for an entirely new energy system. Carbon pricing, in the shape of taxes or emissions trading schemes, is often seen as the main, or only, necessary climate policy instrument, based on theoretical expectations that this would promote innovation and diffusion of the new technologies necessary for full decarbonization. Here, we review the empirical knowledge available in academic ex‐post analyses of the effectiveness of existing, comparatively high‐price carbon pricing schemes in the European Union, New Zealand, British Columbia, and the Nordic countries. Some articles find short‐term operational effects, especially fuel switching in existing assets, but no article finds mentionable effects on technological change. Critically, all articles examining the effects on zero‐carbon investment found that existing carbon pricing scheme have had no effect at all. We conclude that the effectiveness of carbon pricing in stimulating innovation and zero‐carbon investment remains a theoretical argument. So far, there is no empirical evidence of its effectiveness in promoting the technological change necessary for full decarbonization. This article is categorized under: Climate Economics > Economics of Mitigation

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Section: Case Selection and Evaluation Frameworkmentioning

confidence: 99%

The effect of carbon pricing on technological change for full energy decarbonization: A review of empirical ex‐post evidence

Lilliestam

Patt

Bersalli

2020

WIREs Climate Change

101

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“…As a major carbon emitter in recent years, China also pledged at the United Nations Climate Conference to strive to reach the peak before 2030 and to strive to achieve carbon neutrality by 2060 [7,8]. More and more studies have shown that the carbon emission trading system (CETS) plays an important role in reducing carbon dioxide emissions; for example, the United States Regional Greenhouse Emission Reduction Initiative (RGGI) [9,10], the European Union's Carbon Emissions Trading System [11,12], South Korea's 2015 "Greenhouse Gas Emission Allowance Allocation and Trading Act" [13] are important measures for advanced economies to achieve emission reduction targets, which are generally considered to be effective [14]. To cope with the severe greenhouse gas emission problem, in 2011, China officially approved the launch of carbon trading pilot projects in Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong, and Shenzhen, and in 2013-2014, the pilot areas successively launched carbon trading markets, accumulating experience for the construction of carbon markets in developing countries [15,16].…”

Section: Introductionmentioning

confidence: 99%

Can the Carbon Emissions Trading System Improve the Green Total Factor Productivity of the Pilot Cities?—A Spatial Difference-in-Differences Econometric Analysis in China

Huang

Chen

2022

IJERPH

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The carbon emission trading system (CETS) is an important market-oriented policy tool for the Chinese government to solve the problem of high emissions and achieve the growth of green total factor productivity (GTFP). This study makes up for the neglect of the spatial effect of CETS policy in previous studies and adopts the spatial difference-in-differences (DID) Durbin model (SDID-SDM) method of two-way fixed effects to scientifically identify the direct and spatial effects influencing the mechanisms and heterogeneity of CETS on urban GTFP based on the panel data of 281 cities in China from 2004 to 2017. It found that China’s CETS significantly improved the GTFP of pilot cities but produced a negative spatial siphon effect that restricted the growth of GTFP in surrounding cities. Benchmark results are robust under the placebo test, the propensity score matching SDID (PSM-SDID) test, and the difference-in difference-in-differences (DDD) test. The mechanism analysis shows that the CETS effect is mainly realized by improving energy efficiency, promoting low-carbon innovation, adjusting the industrial structure, and enhancing financial agglomeration. In addition, we find that policy effects are better in cities with high marketization, strong monitoring reporting and verification (MRV) capabilities, high coal endowment, and high financial endowment. Overall, China’s CETS policy achieves the goal of enhancing GTFP but needs to pay attention to the spatial siphon effect. In addition, our estimation strategy can serve as a scientific reference for similar studies in other developing countries.

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“…Indeed, US climate policy is moving forward in a “weakly” polycentric manner, where states and municipalities as well as private actors are engaging in climate policy independently (Cole, 2011). Some of the subnational climate policies that are happening in the United States include the Regional Greenhouse Gas Initiative (RGGI) among states in the Northeast (Chan & Morrow, 2019), renewable energy standards in several states (Hess et al, 2016; Stokes, 2020), and cities across the United States are taking various actions to address climate change (Hughes, 2017; Krause et al, 2019). Additionally, private actors and corporations have also pledged to reduce their greenhouse gas emissions (Vandenbergh & Gilligan, 2017).…”

Section: Polycentricity and Climate Changementioning

confidence: 99%

Who should “do more” about climate change? Cultural theory, polycentricity, and public support for climate change actions across actors and governments

Nowlin

2022

Review of Policy Research

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Under a polycentric approach to climate change, action is taken at different scales and across all levels of government and sectors of society. Some scholars have argued that such an approach is the best lens to view the governance of climate change and that a polycentric approach has advantages in addressing collective‐action problems. However, taking a polycentric approach would require public support for action at multiple scales. The issue of climate change is polarized across political beliefs and cultural worldviews and little research has examined how the public views climate action at one level of government relative to others as well as relative to actions by the private sector and by individuals. Using an original survey of the US public from October 2017, I explore who it is that the public thinks should "do more" about climate change and the role that the cultural worldviews posited by cultural theory—hierarchical, egalitarian, individualist, and fatalist—plays in shaping those opinions. Overall, I find support for multiple actors doing more to address climate change, but with differences in support between egalitarians and individualists for actors overall and for the federal government in particular.

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Unintended consequences of cap-and-trade? Evidence from the Regional Greenhouse Gas Initiative

Cited by 43 publications

References 18 publications

The effect of carbon pricing on technological change for full energy decarbonization: A review of empirical ex‐post evidence

The effect of carbon pricing on technological change for full energy decarbonization: A review of empirical ex‐post evidence

Can the Carbon Emissions Trading System Improve the Green Total Factor Productivity of the Pilot Cities?—A Spatial Difference-in-Differences Econometric Analysis in China

Who should “do more” about climate change? Cultural theory, polycentricity, and public support for climate change actions across actors and governments

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