Spatial Spillover Effect of Carbon Emissions Trading on Carbon Emissions Reduction Empirical Data from Pilot Regions in China

Abstract

To estimate the spatial spillover effect of China’s carbon emissions trading (CET) launched in 2013 on carbon emissions reduction, this paper conducts a quasi-natural experiment with the combination of difference-in-differences method (DID) and spatial doberman model (SDM). Moreover, this paper decomposes the policy effect into direct part and spatial spillover part, further analyzes the mechanism from the perspective of energy use, energy structure and energy efficiency. The empirical results show that: (1) From 2013 to 2016, carbon emissions in pilots achieve reduction significantly through CET. Both the results of the robustness test and the endogenous analysis support the above conclusion. (2) Carbon emissions in neighbouring region of pilots are also reduced, which proves the existence of spatial spillover effects from CET. Compared with direct part, the spatial spillover part accounted for smaller proportion in spatial carbon emissions reduction effect. (3) The emission reduction effect of CET continues to increase over the long term, while the spatial spillover effect gradually decreases as distance increases. (4) The decline of fossil energy use is main path to reduce carbon emissions, while the CET fails to increase the use of clean energy, optimize energy use structure or improve energy efficiency.