Abstract
As the highest carbon emission country in the world, it is particularly important to investigate the implementation effect of China’s carbon emission trading (CET) system. Because of the complexity to figure out the counterfactual effect when a single unit is treated, the counterfactual and causal effects of the CET system on the carbon emissions are seldom identified. In order to overcome the weakness that counterfactual effect is difficult to be verified and policy persistence is difficult to be estimated, Synthetic Control Method (SCM) and Regression Discontinuity (RD) are combined to better understand and evaluate the impact of CET system in China. Through the analysis, it is found that CET system is effective in China, but the effect is driven by economic development, energy consumption, FDI and other variables. Because of the differences in economic, geographical, technological and environmental conditions in various areas, each Chinese provincial government should formulate a targeted policy according to local conditions, ensuring an economic and environmentally sustainable growth in the future.
Highlights
Carbon emissions represent an important issue for human beings in the twenty-first century and it is one of the major obstacles for achieving good environmental performances [14].As the world’s largest carbon dioxide emission country, the implementation of China’s carbon emission trading system has attracted world-wide attention
The results show a better outcome of implementation of carbon emission trading (CET) system, since the latter reduces the carbon emissions to some extent
Chinese government should strive to promote the implementation of carbon emission trading system to realize these targets
Summary
Carbon emissions represent an important issue for human beings in the twenty-first century and it is one of the major obstacles for achieving good environmental performances [14].As the world’s largest carbon dioxide emission country, the implementation of China’s carbon emission trading system has attracted world-wide attention. With the Kyoto Protocol’s taking into effect as the starting point, the European Union and the United States and other major countries in the world have established carbon emission trading (CET) system. This system is a market mechanism to promote the trading of global greenhouse gas (GHG) emissions mitigation and reduce the global carbon dioxide emissions [28]. Zhou et al [54] and Cui et al [13] have constructed an interprovincial carbon emissions trading model to evaluate economic performance and the cost-saving effects of CET system in China. Zhang’s study is based on virtual assumptions, and this paper is trying to test the effects of existing carbon emission trading system, based on facts instead of virtual assumptions
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