Abstract
Improving carbon emission efficiency is an important means to achieve pollution reduction and sustainable economic development. Rather than focusing on the implementation of market-incentive environmental policies in developed countries, we study the effect of the implementation of market-incentive environmental policies on the efficiency of carbon emissions in developing countries, which is generally ignored by frontiers researches. Based on panel data of 282 cities at prefecture-level and above in China from 2007 to 2017, we first adopt the non-radial distance function (NDDF) and global DEA model to measure the carbon emission efficiency of China’s cities. Then we take the Chinese carbon emission trading pilot as a quasi-natural experiment and explore the impact of carbon emission trading policy on carbon emission efficiency based on DID method. And the mechanisms are analyzed through the mediation effect model. It is found that the carbon emission rights trading policy can significantly improve the carbon emission efficiency of the pilot cities, and it mainly plays a role through three channels: technological progress effect, green innovation effect and energy consumption structure optimization effect. The heterogeneity test results show that for resource-based cities and cities with a higher degree of marketization, the carbon emission trading policy has a more obvious effect on improving carbon emission efficiency.
Highlights
China’s economy has achieved rapid growth in the past four decades based on the traditional factordriven development mode, which is accompanied by serious environmental pollution and high carbon emissions
We introduce the time trend after the policy implementation year in column (3), showing the dynamic effect of carbon emission trading policy
Column (4), on the basis of column (3), further introduces the time trend for the first three years before policy implementation to test whether the carbon emissions trading policy meets the parallel trend assumption of the Difference in Difference (DID) model. current represents the intersection of treat and the dummy variable in 2014, which is defined as the base year. pre_3 is the intersection of treat and the dummy variable in the third year before the implementation of the policy, that is, the year of 2011
Summary
China’s economy has achieved rapid growth in the past four decades based on the traditional factordriven development mode, which is accompanied by serious environmental pollution and high carbon emissions. As the international community pays more attention to global climate change, China is under increasing pressure to reduce carbon emissions. China has proposed goal of carbon peak in 2030 and carbon neutralization in 2060, which puts forward higher requirements for carbon emission efficiency. To control carbon emissions as soon as possible, the Chinese government at all levels have carried out a series of environmental regulation policies to promote the carbon emissions over the years, such as developing low-carbon pilot cities and increasing forest carbon sinks. Carbon emission trading is one of the key policies.
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