Abstract
This paper explores the effect of China’s emission trading scheme (ETS) pilot policy implemented during 2013-2014 on carbon emission performance. Adopting the Difference-in-Difference (DID) model, we find that: 1) China’s ETS pilot policy can significantly improve the carbon emission performance of listed companies in the pilot provinces. 2) The heterogeneity analysis shows that the carbon emission performance of listed companies in the eastern coastal pilot areas has improved significantly, which is not significant in the central and western pilot areas. 3) We find that China’s ETS pilot policy can significantly improve innovation capabilities of listed companies, suggesting that innovation is a channel for the impact of the China’s ETS pilot policy on carbon emission performance in the pilot provinces. Overall, our study shows that ETS pilot policy has played a governance role in China and improved carbon emission performance. We further highlight some important policy implications with respect to helping companies save energy and reduce emissions, and promoting the further improvement of China’s ETS pilot policy.
Highlights
In order to cope with the problem of global warming and seek a balance and win-win situation between the economy and the environment, countries around the world have never stopped making efforts to explore
The basic regression results in the first column show that the coefficient of Treat × T is significantly negative at the 10% level (α1 −0.286, p < 0.10), indicating that the China’s ETS pilot policy reduce the carbon emission intensity of listed companies in the pilot provinces and improve carbon emission performance, which is consistent with Hypothesis 1
Our study finds that 1) China’s ETS pilot policy can significantly improve the carbon emission performance of listed companies in the pilot provinces
Summary
In order to cope with the problem of global warming and seek a balance and win-win situation between the economy and the environment, countries around the world have never stopped making efforts to explore. It can be seen that the public have been paying continuous attention to carbon emissions policies, which shows that the effect of China’s ETS pilot policy has extremely important practical significance. Building a national carbon emission trading market is a major institutional innovation to use market mechanisms to control and reduce greenhouse gas emissions and promote the development of a green and low-carbon economy, which is an important policy tool for achieving carbon peaks and carbon neutral. Can China’s ETS pilot policy effectively improve the carbon emission performance of listed companies? Based on the setting of quasi-natural experiments, this paper examines the impact of China’s ETS pilot policies on the carbon emission performance of listed companies in the pilot provinces, which provides evidences for China regulators to further improve ETS.
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