Carbon Emission Trading System Research Articles

Impact of carbon emission trading system on green technology innovation of energy enterprises in China

China proposed establishing a carbon emission trading market in its 12th Five-Year Plan to reduce carbon dioxide emissions through market mechanisms, promote the development of science and technology and help China become an environment-friendly country. To examine the impact of carbon emission trading on green technology innovation in Chinese energy enterprises, data from 1993 to 2020 were collected from 494 A-share-listed energy enterprises. Enterprises located in the pilot area of carbon emissions trading were assigned to the treatment group, while those in the non-pilot area were assigned to the control group. The propensity-score-matching method was utilized to match the treatment group with the control group, and the resulting samples were used as the actual sample data. The difference-in-differences method was then employed to assess the net impact of carbon emission trading and investigate its effect on green technology innovation in energy enterprises. This empirical study suggested that carbon emission trading has a positive impact on green technology innovation in energy enterprises, particularly state-owned ones. Larger enterprises are more willing to engage in green technological innovation than small enterprises. Furthermore, when faced with a carbon emission trading system, ‘mature’ companies tend to pay more attention to green technology innovation than younger enterprises do. This study puts forward policy measures for establishing a national-level carbon emission market in China in the future.

The Effect of China’s Carbon Emissions Trading System on the Power Sector’s CO2 Emission Reduction Based on the "West-East Power Transmission" Project

The Effect of China’s Carbon Emissions Trading System on the Power Sector’s CO2 Emission Reduction Based on the "West-East Power Transmission" Project

The Impact of Carbon Emissions Trading System on Regional Green Innovation: A Perspective of Foreign Investment Agglomeration

The Impact of Carbon Emissions Trading System on Regional Green Innovation: A Perspective of Foreign Investment Agglomeration

Grappling with the trade-offs of carbon emission trading and green certificate: Achieving carbon neutrality in China

Although our knowledge of national carbon emission trading system and green certificate trading system are powerful incentive instruments that can deliver on increasingly ambitious climate targets in China, there remains an uncertainty of systems' structural reforms. This study builds on and extends a well-established dynamic computable general equilibrium (CGE) model to incorporate carbon trading system and green certificate trading system into the modeling framework, simulating a diverse of system development pathways further allows an exploration of the many possible policy effect. Then, using total factor productivity as a comprehensive indicator to asses policy effectiveness, the evolutionary trend of comprehensive effects under different paths are separately evaluated to discover the reforms’ optimal range. Our work offers main results: First, these instruments provide a price signal. The introduction of a carbon allowance auction drive up carbon prices, while the implementation of a green certificate punishment and the expansion of the trading scope promote an increase in green certificate prices. Second, all policy scenarios that help reduce carbon emission intensity and optimize the power supply structure. However, in achieving the net-zero goal, the green certificate policy incurs more economic costs than the carbon trading policy. Indeed, the combination of multiple policy tools alleviates the decline of social welfare levels. Third, synergism design among policy tools: the focus should be on carbon trading policy from 2021 to 2030, green certificate trading policy from 2030 to 2050, and strengthened policy from 2050 to 2060. Reform measures within policies may need to be introduced in a timely manner. This study offers specific insights and tailored policy proposals to support policymakers in balancing environmental goals with economic and social needs in light of the aforementioned findings.

The substantial impacts of carbon capture and storage technology policies on climate change mitigation pathways in China

Carbon capture and storage (CCS) technology, considered as a pivotal tool in mitigating climate change within the fossil energy system, particularly in China, has experienced slower development than expected. The exploration of direct incentive policies to facilitate its growth remains relatively underdeveloped. This study developed a hybrid dynamic computable general equilibrium (CGE) model to simulate the substantial impacts of CCS incentive policies on China within the context of carbon neutrality target. Two potential incentive policies, carbon emission trading system (ETS) and 45Q tax credit, were simulated, with different sectoral coverage. The results indicate that CCS technologies can reduce carbon emissions by 960 ∼ 1,604 MtCO2 annually by 2060 through the strategic implementation of these incentive policies. The 45Q tax credit demonstrates its effectiveness in promoting early-stage research and development (R&D) and demonstration of CCS, while the ETS policy facilitates the commercial development of CCS in the later stage of development. By 2060, the implementation of CCS incentive policies could potentially result in 7.7 ∼ 17.4 % reduction in China’s primary energy consumption, 71.2 ∼ 82.7 % decrease in the carbon price of ETS and 5.64 ∼ 6.59 % increase in the GDP compared with the no-policy scenario. In addition, the sectoral output in various sectors and the welfare of urban and rural households also increase. This paper provides an important reference for the realization of China’s carbon neutrality goal and the model framework can be applied to other countries.

How the Carbon Emissions Trading System Affects Green Total Factor Productivity in Logistics Industry?

How the Carbon Emissions Trading System Affects Green Total Factor Productivity in Logistics Industry?

Modeling the Nexus between European Carbon Emission Trading and Financial Market Returns: Practical Implications for Carbon Risk Reduction and Hedging

The carbon–financial nexus helps firms evaluate susceptibility to carbon risk more effectively. This is the first research article to model the short- and long-run co-integrating association between European financial markets, the CBOE oil price volatility index (OVZ) and the European carbon emission trading system (EU-ETS) by using the daily returns from 1 October 2013 to 1 October 2023. We utilize co-integration test followed by the ARDL framework with an error correction mechanism (ECM). Moreover, we utilize the DCC-GARCH-t copula framework to estimate the hedge ratio and to select an optimal portfolio weight for carbon risk hedging. Overall, the findings suggested that EU-ETS (OVZ) has a consistent positive (negative) short-term influence on all the equity returns of Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Spain and the stock indices of the whole Eurozone. However, in the long term, EU-ETS has a positive (negative) effect on the stock returns of France and the Eurozone (Belgium and Spain). Belgian and Spanish companies could implement long-term carbon reduction policies. Belgian and Spanish firms should focus on the utilization of green energy resources and the internalization of carbon emission-free mechanical processes as this may offer a safeguard against the additional pressure arising from escalating carbon prices. Finally, an optimal portfolio weight selection strategy based upon the DCC-GARCH-t copula approach aims for higher hedging effectiveness (HE) than the hedge ratio strategy when adopting short-term positions in Italian and Danish equity markets to reduce the risk of long-term EU-ETS volatility.

The Impact of Carbon Emission Trading System on ESG of Agricultural Enterprises: Evidence from 24 Listed Agricultural Companies in China

With China’s dual carbon goals of carbon peaking and carbon neutrality, the carbon emission trading system will play a crucial role. In addition, agriculture, which is closely linked to carbon emissions, is a foundational industry in China. It is worth paying attention to how it responds to carbon emission trading policies. This study uses data from agricultural listed enterprises from 2009 to 2022, and employs the Difference-in-Differences (DID) method and the intermediary effect model. The evidence suggests that the the carbon emission trading system will significantly improve the the ESG evaluation of agricultural enterprises. Furthermore, green management innovation, green total factor productivity, and CSR information disclosure quality of enterprises will act as intermediaries. The study calls for the government to accelerate the establishment of a national carbon trading market, improve reward and penalty systems, and evaluation frameworks for green innovation in agricultural enterprises. It also emphasizes the need to strengthen pre-subsidies for small-scale enterprises, encourage environmental literacy training for management personnel in agricultural enterprises, intensify green innovation efforts, and establish relevant department assessments of corporate social responsibility.

Research on the legal regulation and improvement of carbon emission trading

Carbon emission trading system is a kind of environmental institutional arrangement to solve externalities through market mechanism, which is one of the most effective ways to deal with climate change in China and to control air pollution represented by haze pollution. In accordance with the requirement of "using system to protect ecological environment", China should position carbon emission trading system as the basic legal system of environmental protection in the new Environmental Protection Law, and from the aspects of reasonable determination of total carbon emission control mechanism, allocation of carbon emission trading quota, selection of pricing mechanism, and improvement of government supervision mechanism, etc. To improve China's emissions trading system.

A blockchain system supporting cross-border data protection and consistency verification in unified global carbon emissions trading framework

The Carbon Emission Trading (CET) system has been independently implemented in dozens of countries to protect the environment. Meanwhile, there are efforts underway to establish a Unified Global CET (UG-CET) system, which aims to better coordinate emission reduction efforts worldwide and protect the global environment. However, these efforts overlook the issue of data security, which may raise concerns for countries considering participation in such a system. In this paper, we propose a UG-CET system that addresses data security concerns. Firstly, it safeguards cross-border data by not requiring countries to share detailed data, but only providing generalized data. Secondly, it is capable of auditing data, ensuring data consistency even in the absence of shared original data. Therefore, it respects the interests of participating countries by not only protecting their own data but also ensuring the authenticity of data shared by other countries. Finally, the proposed scheme is validated using authentic CET data, and the results demonstrated that it can maintain a high efficiency while achieving a verification accuracy of 99.6%, effectively ensuring the security and consistency of the data flow in carbon emission trading.

A green path towards sustainable development: The impact of carbon emissions trading system on urban green transformation development

This study aims to explore the direct and indirect impacts of the Carbon Emission Trading System (CETS) on the green transition development (GTD) of Chinese cities. This paper constructs a GTD evaluation system from the perspective of prevention and governance at the source, in terms of carbon reduction, pollution reduction, green expansion and growth, and measures the GTD performance of 281 cities based on the EW-TOPSIS model. It is found that the average increase in GTD of the sample cities from 2006 to 2020 is 3.40 %, the GTD progress of the 281 cities has a considerable positive spatial autocorrelation, with the GTD progress of the CETS pilot cities being significantly bigger than that of the non-pilot cities. Further this paper adopts the spatial difference model (S-DID) to scientifically identify the influence mechanism and heterogeneity of the direct and spatial effects of CETS on city GTD, and the results show that CETS has a positive effect on the GTD of both local and neighboring cities. Propensity score matching (PSM) is used to further corroborate these findings. The study also shows that CETS improves local GTD by promoting green innovation, rationalizing industrial structures, and enhancing energy efficiency in cities. Nevertheless, the ensuing siphon effect hinders nearby cities' levels of energy efficiency, industrial structure rationalization, and green innovation. The policy effects of CETS are more significant in large cities, eastern cities, old industrial areas, and non-resource-based cities. CETS can work in synergy with smart city construction, low-carbon city pilot policies, and emission trading policies to accelerate the process of GTD.

Will Environmental Regulations lead to China's outward Foreign Direct Investment?: A Quasi Natural Experiment Based on China's Carbon Emission Trading Pilot Policy

Foreign direct investment (OFDI) is an important part of China's "going global" strategy. With the continuous expansion and rapid development of OFDI in China, domestic environmental problems are becoming increasingly severe. Therefore, China has established a pilot policy of Carbon Emission Trading System (ETS) to address environmental issues. This article takes the implementation of ETS pilot policies as a quasi natural experiment, uses the double difference method (DID model) to empirically test whether ETS pilot policies will lead to OFDI, and uses the composite control method for robustness testing to supplement and expand the conclusions of the DID model. In addition, incorporate the "Pollution Shelter Hypothesis" and "Porter Hypothesis" into the same framework to explore the impact mechanism of ETS pilot policies on OFDI. Based on the conclusions drawn, it is recommended to further improve the design of carbon trading systems in pilot areas and establish a national carbon emission trading system to enhance the quality of China's outward foreign direct investment.

Effects of carbon emission trading system on corporate green total factor productivity: Does environmental regulation play a role of green blessing?

Extant studies focus on the impact of environmental regulation on regional economic growth or environmental pollution, and a lot of research outcomes have been made. However, from the perspective of corporate green sustainable development, the question of whether carbon emission trading represents a “green blessing” remains unclear. To address this issue, we employ a staggered difference-in-differences model to investigate the effects and mechanisms of the carbon emissions trading pilot policy (CETPP) on the green total factor productivity (GTFP) of listed manufacturing companies in China. Our results demonstrate that: a) CETPP can effectively promote corporate GTFP, and the robustness of this result is verified through a series of checks; b) the mediating role of environmental, social, and governance (ESG) performance is critical in the relationship between CETPP and corporate GTFP, with environmental and governance performance serving as two key transmission channels; and c) CEO green experience and public environmental concern both play the moderating roles on the relationship between CETPP and GTFP; d) CETPP has a stronger positive impact on GTFP of private enterprises and enterprises in the maturity life cycle; and e) CETPP has a spatial spillover effect on GTFP, and the effect will decay as spatial distance increases. Our study offers both theoretical and practical implications for enterprises to achieve their green economic development objectives, so as to promote China's high-quality development.

China's carbon emissions trading system and energy directed technical change

Energy directed technical change is an effective means of reconciling economic growth with, not only currently available resources, but also sustainable environmental needs. Whether a carbon emissions trading system (ETS) can internalize carbon dioxide emissions costs, and thus induce energy directed technical change, is a common topic of concern among both political and academic circles. Our study aims to provide evidence for this issue by examining the impact of China's carbon ETS on the energy directed technical change. By adopting a DID estimation approach, we find that the carbon ETS can significantly promote technical change towards clean energy after empirical testing and this conclusion holds up following several robustness tests. This directed effect is realized through a price inhibition effect and a market scale expansion effect; the mechanism test suggest that the market scale expansion effect plays a larger role than the price suppression effect. Lastly, the more significant effect in both non resource-based cities and in large cities suggests that a carbon ETS exerts a heterogeneous effect on energy directed technical change. In addition, the existence of paid auctions of carbon allowances can better induce technical change in favor of clean energy than the free distribution of carbon allowances.

Practical effects of carbon emissions trading system on energy efficiency

The carbon emissions trading system (CETS) is a helpful policy instrument for separating carbon emissions from economic expansion, and it significantly impacts energy efficiency (EE). This study uses 30 Chinese provinces from 2007 to 2020 as its research samples, and classifies energy efficiency into single-factor energy efficiency (SFE) and total-factor energy efficiency (TFE), using the difference-in-differences model to examine the effect and mechanism of the CETS on EE. As an additional tool to assess the efficacy of the CETS, the corresponding evolution of the rebound effect of energy-related carbon emissions (RECE) is also calculated. This study shows that the CETS can significantly improve EE in China's pilot provinces. The influence mechanism indicates that the effect of the CETS on EE is influenced by the level of government governance, green innovation, and industrial structure optimization. Further study finds that after the CETS was carried out, the RECE in pilot provinces was higher than that in non-pilot provinces, and 31.4% of carbon emissions reduced by EE improvement rebounded. Therefore, the CETS has yet to realize its full carbon reduction potential. The study offers specific policy proposals for the enhancement of China's CETS in light of the aforementioned findings.

Synergizing policies for carbon reduction, energy transition and pollution control: Evidence from Chinese power generation industry

To mitigate climate change and achieve sustainable development, Chinese governments have introduced “1+N” “dual-carbon” policy system aimed at reducing CO2 emissions, transforming energy structures and controlling pollution. An effective policy mix and synergy is crucial for achieving the emission reduction targets and for ensuring the effectiveness of the policies, and it is therefore of great practical importance to provide a pathway for policy synergy based on assessing policy effectiveness. This paper selects three policies, namely the carbon Emission Trading System (ETS), Coal Control and Clean Utilization (CCCU), and Green Financial Reform and Innovation Pilot Zone (GFPZ), sets up ten scenarios, adopts difference-in-differences (DID) models to evaluate the impact, and give a pathway for policy synergy. The results show that ETS, CCCU, and GFPZ policies have significant positive effects on carbon emission reduction, energy structure transformation, and industrial environmental pollution control, respectively; CCCU has synergistic effects with ETS and GFPZ policies in controlling coal consumption and increasing the completion of industrial pollution control investments, respectively; while GFPZ policies have conflicting effects with CCCU and ETS in reducing carbon emissions and coal consumption, the GFPZ policy has conflicting effects with CCCU and ETS in reducing carbon emissions and controlling coal consumption. Finally, the study proposes a phased policy support system around carbon emission reduction in the power generation industry, energy structure transformation, and industrial environmental pollution control before 2030 and from 2030 to 2060.

탄소배출권 거래가 전남지역 산업 생산활동에 미치는 영향

When comparing South Korea's emission trading market on a global scale, such as in Europe, the United States, and China, South Korea possesses the hardware infrastructure required for the operation of an emission trading system. However, it appears to be lacking in the software aspect, including the implementation of various carbon reduction policies to complement the carbon emission trading system. The study empirically analyzes the impact of the carbon emission trading system on industries in Jeonnam. First, the carbon emission trading system does not seem to significantly constrain short-term production activities of businesses. Second, when examining the impact of carbon emission prices (KAU, EUA) on major industries in the Jeonnam region, carbon-related variables act as information intermediaries. It is evident that the chemical and steel industries in Jeonnam play the role of information recipients. Third, concerning the connectivity network with KAU as the central variable, it is apparent that the chemical and steel industries in Jeonnam receive more influence from KAU rather than influencing it. In the case of the connectivity network with EUA as the central variable, EUA plays the role of information recipients for the chemical and steel industries. This can be attributed to the participation of these industries in the European carbon emission trading market while exporting chemical and steel products to Europe, affecting EUA demand and prices. In the future, the impact of carbon emission reduction policies is likely to increase for domestic industries and companies in the Jeonnam region in the short term. To achieve regional and national carbon neutrality, policy measures tailored to the industrial structure characteristics of the Jeonnam region must be developed.

The role of China's carbon emission trading system in economic decarbonization: Evidence from Chinese prefecture-level cities

Based on the panel data from 283 prefecture-level cities in China between 2009 and 2019, this study examines the impact of China's carbon emissions trading system on reducing carbon emissions and its mechanisms, using the PSM-DID method. The findings demonstrate that the carbon emissions trading system can effectively decrease the total carbon emissions in pilot cities in China, and has a positive spatial spillover effect on neighboring cities of the pilot areas. The carbon emission trading system primarily reduces carbon emission by incentivizing businesses to implement eco-friendly practices and improve the industrial structure of pilot cities. Increased financial marketisation can promote the carbon emission reduction effects of the trading system. The impact of the carbon emission trading system on old industrial base cities and inland cities is more significant than those on non-old industrial base cities and coastal cities.

Does the carbon emission trading scheme foster the development of enterprises across various industries? An empirical study based on micro data from China

To achieve the goal of carbon reduction, China has been piloting the Carbon Emission Trading System (CETS) since 2013. As the economy faces a downward trend, it is significant to explore the impact of CETS on business development. There is still debate in academia about whether this policy can boost the level of business development. This paper, based on all A-share data of listed companies in China from 2009 to 2018, uses the Difference in Differences (DID) model to verify the impact of CETS on the input of capital and labor factors and the level of technology in enterprises and discusses the industry heterogeneity of this impact in detail. Placebo tests, propensity score matching, and triple differences ensure the robustness of the conclusions. In further research, this paper decomposes the policy effect of CETS. It regresses the impact of carbon quota prices and carbon market trading scale on business development. The final conclusion is that CETS has a positive impact on the input of capital and labor in enterprises and a negative impact on the level of technology. After distinguishing industries, this conclusion shows differences according to different characteristics of high emissions and low emissions. In addition, the increase in carbon quota prices hinders business development, while the scale of carbon market trading shows an inverted “U” relationship with business development. The article provides meaningful policy references for China and countries in the early stages of CETS construction.

A Comparative Study on Carbon Emission Trade System Between China and US

It has been years since the Paris Agreement and most states are still struggling with their goals to reduce the carbon emission. Many ways and measures are taken but few show effectiveness. Because the industrial development and daily lives of the common people count on the activities that emit much carbon dioxide. Most governments are reluctant to restrict the carbon emission of local industry. Whats more, in the international level, the developed countries refused to take all reduction responsibilities based on their historical emission volume. While the developing ones are eager to pursue more progress in industry. To overcome such difficulty, the market-orientation carbon emission regulations are created to tackle with the challenges that the normal order-control regulations cannot deal with. In contrast to the carbon tax that is more direct and obvious, the carbon emission trade system is favored by both China and US. The system of carbon emission trade system is much younger and less experienced than it is in the US. The comparative study on the carbon emission trade system needs to be done to find more possible solutions to improve the current carbon emission trading system of China. In the paper, main research method is the comparative research and system analysis. In conclusion, the carbon emission trade system of China is relatively immature, lacking the legal support and clear regulations. The carbon emission trade system in China needs stronger laws to support, achieving more active flexible form of trading. The central and local governments should also provide the proper policies like open auction and third-party supervision.