A study on the impact of the carbon emissions trading policy on the mining industry based on Porter hypothesis

Abstract

In order to take Chinese actions and contribute Chinese wisdom to the fight against global climate change, China launched the carbon emissions trading policy (CETP) in 2011, thereby accumulating advanced experience in utilizing market mechanisms to reduce CO2 emissions and help reduce pollution. Mining is an irreplaceable pillar industry of the national economy. In the context of China's economic development shifting from high-speed growth to high-quality development, there is an urgent need to promote green and low-carbon development in the mining industry. The mining industry consumes a lot of energy and generates a lot of carbon emissions during extraction and processing. The CETP, which is one of the important regulatory tools for reducing carbon, will certainly have a huge impact on the green, low-carbon development of the mining industry. We use relevant data from 31 provinces and regions in China from 2006 to 2019, takes the CETP introduced in 2011 in seven provinces and cities as a quasi-natural experiment, and applies the difference-in-difference model (DID) to explore the Porter effect of the CETP on the mining industry. The robustness of the predictions is measured using the placebo test, the test of the alternative variable, and the test of the exclusion of the relevant policies in the same period. The results show that the CETP significantly reduced the business performance of the mining industry and did not increase the green total factor productivity (GTFP) of the mining industry but increased the level of science and technology innovation (STI) in the pilot provinces. That is, the impact of the CETP on the mining industry is consistent with the weak Porter hypothesis. The study results show that improving the CETP will significantly promote the realization of China's mining industry's green, low-carbon, and high-quality development. The state should support and subsidize mining enterprises that meet environmental regulation standards and increase their motivation to protect the environment. The government should increase environmental enforcement to ensure the effective implementation of the CETP. Mining enterprises should promote scientific and technological innovation and enhance their technological innovation capacity.