Can China’s Policy of Carbon Emissions Trading Optimize Manufacturing Structure? Evidence from Guangdong Based on a Synthetic Control Approach

Yutao Lei,Xuan Zhang,Wenxiang Peng

doi:10.3390/su14063302

Yutao Lei, Xuan Zhang + Show 1 more

Open Access

https://doi.org/10.3390/su14063302

Copy DOI

Journal: Sustainability	Publication Date: Mar 11, 2022
Citations: 11	License type: CC BY 4.0

Affiliation: South China University of Technology

Abstract

On 16 July 2021, the national carbon emissions trading market opened, and the national carbon market officially started online trading. However, it is still unclear whether the carbon emissions trading policy can effectively optimize the manufacturing structure. We studied the experiment of the carbon emissions trading policy that has been ongoing in Guangdong, China, since 2013 to assess the impact of this policy on the manufacturing structure in Guangdong Province compared to other provinces in mainland China that have not implemented a carbon trading pilot policy. The methodology uses a synthetic control method. Using this method, a “synthetic Guangdong” was constructed using data from 23 provinces (municipalities and autonomous regions) in mainland China that did not implement carbon trading policies from 2009 to 2019. The synthetic province had similar observed characteristics to Guangdong before the carbon emissions trading experiment in 2013. Therefore, manufacturing structure differences between Guangdong and the synthetic province after 2013 could be attributed only to the carbon emissions trading policy. The conclusion indicates that in the short term, the carbon emissions trading policy implemented in 2013 can significantly promote manufacturing upgrading and manufacturing greening in Guangdong Province. This policy can optimize the manufacturing structure of Guangdong Province through improving the technological innovation of enterprises and increasing foreign direct investment. Therefore, in regions whose manufacturing structure is similar to Guangdong Province, implementing a carbon emissions trading policy can promote manufacturing upgrading and manufacturing greening.

Highlights

Global warming will cause enormous damage to the natural ecological environment on which human beings depend, and greenhouse gas emissions from human activities have been the leading cause of global warming since the mid-20th century
The results show that carbon emissions trading can significantly promote upgrading of the manufacturing structure (U MS) and greening of the manufacturing structure (GMS)
The results show that the coefficient estimates of the level of technological innovation are optimistic, indicating that technological innovation promoted the optimization of the manufacturing structure in Guangdong after implementing the carbon emissions trading policy

Summary

Introduction

Global warming will cause enormous damage to the natural ecological environment on which human beings depend, and greenhouse gas emissions from human activities (mainly carbon dioxide emissions) have been the leading cause of global warming since the mid-20th century. As the world’s largest developing country and the largest CO2 emitter, China attaches great importance to the issue of addressing climate change and is actively taking various measures to promote energy conservation and emissions reduction and facilitate the transition to a low-carbon economy. The carbon emissions trading market is considered an effective means of reducing global greenhouse gas emissions and addressing climate change due to its flexibility, cost-saving ability, and effectiveness [1]. Since its launch in 2005, it has become the world’s first and largest international mandatory carbon trading program, covering more than 11,000 power stations and industrial plants in 31 countries [4]. It regulates around 50% of the total greenhouse gas (GHG) emissions in Europe.

Objectives

Results

Conclusion