Impact Of Emission Trading Scheme Research Articles

Emissions trading scheme participation and firms’ cash holdings

This study investigates the effect of participating in an emissions trading scheme (ETS) on firms' future cash holdings. Using global firm-level data from different continents, our findings show that, notwithstanding the benefits of ETS, its membership has a significant impact on firms' cash holding. Additionally, we document that bankruptcy risk, firm growth potential, corporation tax, and financial constraints mitigate the impact of ETS on corporate cash holdings. Furthermore, we find that the country of operations, continent, and legal origin of the domiciled firm influence the association between ETS and firm cash holdings level. The results are robust to difference in differences (DiD) estimation and a variety of econometric specifications.

The Double-edged Impact and Solution of Emission Trading Scheme: Perspective from China

Emission Trading Scheme (ETS) is widely used for carbon emission globally, but there are few comprehensive studies about the debate of the impact of ETS. This paper presents new evidence of the double-edged impact and solution of Emission Trading Scheme by conducting qualitative methods like literature review to overcome the debate. Using evidence from China, it is found that the positive impact of ETS includes emission reduction, technological innovation and cheaper cost for emission reduction; the negative impact includes loss of GDP, carbon leakage and price bubble. In light of the findings, the negative impact of ETS could be overwhelmed by related policies like extending the coverage of areas and industries, combing ETS with a package of other related intervention and the supply of carbon tax.

Carbon emission trading scheme and corporate labor investment efficiency: evidence from China.

Under the dual pressure of environment and employment, it has been a hot topic whether government departments can achieve the double dividend of "environmental improvement" and "employment promotion" via reasonable market-based environmental regulation. In light of the exogenous policy event of the carbon emission trading scheme (ETS), this study investigates the impact of ETS on the corporate labor investment efficiency of a sample of industrial companies listed in China's A-share from 2007 to 2020. The study reveals that the ETS can significantly improve corporate labor investment efficiency. Further research finds that the promotion of green technology innovation and alleviation of financing constraints as crucial mechanisms by which ETS affects corporate labor investment efficiency; the ETS improves the corporate labor investment efficiency more significantly in enterprises with a lower marketization degree, lower labor intensity, and non-state-owned enterprises. The improvement of labor investment efficiency by the ETS is associated with the amelioration of labor under-investment and suppression of over-investment. Furthermore, the improvement of labor investment efficiency by the ETS can enhance enterprises' productivity. In light of these findings, this study provides suggestions for the improvement of ETS from the microscopic perspective of firms and offers ideas for the improvement of corporate labor investment efficiency.

The hidden benefit: Emission trading scheme and business performance of downstream enterprises

There seems to be no empirical study on the impact of emission trading scheme (ETS) on downstream industries. However, carbon trading may affect the performance of downstream firms via cost effect or spillover effect through the industrial chain. Based on the data of listed companies, this paper innovatively constructs three-dimensional data of “upstream firm - downstream firm - time”, with a total of 40,437,001 valid observations, simulates the upstream and downstream relationship between enterprises, and estimates the impact of carbon trading on the downstream performance using the Pair Weighted Difference in Difference in Difference (PW-DDD) model. The results show that the effects of carbon trading on downstream performance is negative in the short run, but it has positive significance in the long run. Heterogeneity is also found: the downstream firms with significant industrial chain relationships are more positively affected, such as chemical, petrochemical, and cement. In addition, carbon trading may improve productivity in different sectors in the same region or the same industry in other areas, thus improving the performance of non-ETS-covered enterprises.

Can the carbon emission trading scheme promote corporate environmental protection investment in China?

Since 2013, a pilot market of carbon emission trading scheme (ETS) has operated in China, with results showing a reduction in the carbon intensity of the economy. How does ETS affect enterprises' environmental protection behaviors? We conducted a quasinatural experiment by using A-share-listed companies from 2010 to 2019 as research samples and matching them using the propensity score matching method. The difference in differences model was then used to empirically assess the effect and influencing mechanism of the ETS on corporate environmental investment. Finally, the robustness and heterogeneity of the empirical results were checked. ETS seems to have significantly increased the levels of capitalized and expense-based environmental protection investment. Among them, low-carbon technological innovation plays an intermediary role in the impact of ETS on capitalized environmental protection investment. State-owned enterprises preferred capitalized environmental protection investment, whereas private enterprises preferred expense-based environmental protection investment. Moreover, having a political connection could compromise the role of ETS in promoting environmental protection investment. Our study provides some suggestions, such as accelerating the rollout of low-carbon technologies, increasing financial support for private enterprises, establishing an official reputation mechanism, and strengthening the transparency of carbon emission information disclosure.

Why does tourism have to confront the emissions trading scheme? Evidence from China

This article examines the impact of ETS on tourism to demonstrate why tourism has to confront the emissions trading scheme (ETS), a world's leading climate policy. For this purpose, the current paper estimates the economic and environmental impacts of ETS on China's tourism and the underlying influence mechanism. The methodology draws on a time-varying difference-in-differences method combined with the propensity score matching technique based on Chinese provincial regions' panel data between 2005 and 2019. The results show that the Chinese ETS significantly reduces tourism-related carbon emissions and carbon intensity as well as contains tourism economic growth. Moreover, such effects increase gradually since the policy implementation in 2013. Moreover, the price significantly mediates ETS's influence on the economy, and the energy consumption structure significantly mediates ETS's influence on carbon emissions. The impact of ETS on tourism also varies considerably across different regions with various levels of economy, tourism, energy and industry.

Evaluating the impact of carbon emissions trading scheme on Chinese firms’ total factor productivity

In the context of addressing climate change and promoting high-quality development, it is necessary to evaluate the impact of carbon emissions trading scheme (ETS) on China’s total factor productivity (TFP). Based on a quasi-experimental design, we provide firm-level evidence of TFP improvement from China’s pilot ETSs. Using panel data of Chinese listed firms during 2009–2018, the difference-in-differences method is adopted to evaluate the impact of ETS on the firm-level TFP. The results show that the ETS significantly improves the firm-level TFP, increasing it in pilot regions by approximately 14% when compared with non-pilot regions. Further analysis shows that this improvement is not affected by the heterogeneity of firms’ ownership, but by industrial heterogeneity. Moreover, this improvement is realized by promoting firms’ operating and profitability capacity. We also find that the impact of ETS on firm-level TFP is stable and exhibits no time lag. Our findings not only improve the effectiveness evaluation framework of the Chinese ETS, but also have some implications for how to promote the construction of a national carbon emissions trading market in the context of high-quality development.

Promoting industrial structure advancement through an emission trading scheme: Lessons from China’s pilot practice

This study explores the impact of emission trading scheme on industrial structure advancement by using the synthetic control method and the difference-in-difference (DID) method. We not only analyze the robustness of the policy effect but also empirically test the formation mechanism of the emission trading pilot to promote industrial structure advancement. The results show that the implementation of the pilot can promote the advancements of the industrial structure. However, the differences in economic development and technology levels mean that policy effects vary in different areas. Significant promoting effects were found in eight areas: Chongqing, Hubei, Hunan, Jiangsu, Inner Mongolia, Shaanxi, Shanxi, and Tianjin. Meanwhile, it has little effect in Zhejiang, Henan, and Hebei. This heterogeneous effect was further confirmed by DID analysis. The empirical analysis supports the Porter hypothesis, and technological innovation has a mediating effect on the impacts of emission trading on the industrial structure advancement. This study will be useful for policymakers to promote industrial upgrading with the help of emission trading scheme.

Is emission trading scheme an opportunity for renewable energy in China? A perspective of ETS revenue redistributions

Emission Trading Scheme (ETS) and renewable energy generation are emission reduction methods in most countries in the world. However, few studies have focused on the impact of ETS on renewable energy. The question is, can carbon trading promote renewable energy generation? This paper first analyzes different distribution strategies of ETS revenue by applying dynamic recursive computable general equilibrium model with multi-sectors. Practical scenarios and better options of distribution of ETS revenue by a comprehensive evaluation based on entropy weight method are proposed. The results show that ETS with no subsidy to renewable will reduce the demand for energy, increase the cost of renewable energy sources and decrease the generation. ETS will be the spring of renewable energy generation when most of the revenue is used for all kinds of renewable energy sources, instead of some of them. The growth of renewable energy generation is also substantial. It is necessary that a small portion of ETS revenue should be used to subsidize residents to reduce the gap between the rich and the poor. If this income is used for government investment and consumption, it will also help to mitigate economic losses, which is caused by the direction of investment by the Chinese government.

SALIM TİCARETİ SİSTEMİNİN TÜRK DENİZ TAŞIMACILIĞI VE FİNANSAL RAPORLAMA AÇISIN-DAN İNCELENMESİ

Although the amount of greenhouse gases (GHGs) from maritime transport is very low amongst total anthropogenic emissions, reducing shipping related airborne emissions has become an important topic for policy-makers during last decades. Emission Trading Scheme (ETS), which is introduced by Kyoto Protocol, is a cap & trade system used to reduce GHGs by promoting the economic competitiveness. ETS policies should include maritime transport and should develop accounting approaches within the framework of financial reporting standards to increase the applicability of financial instruments notable for their complexity. The aim of this study is to examine the applicability of ETS policies to the Turkish maritime sector and the impact of ETS on financial reporting. A comprehensive review based on the literature has shown that it is necessary to implement emission trading considering international standards for international sectors and it is important to prepare national policies accordingly in order to avoid pressure factors in national economies and not to avoid international harmonization in financial reporting.

The impact of Emission Trading Scheme (ETS) and the choice of coverage industry in ETS: A case study in China

Emission Trading Scheme (ETS) is one of the most effective measures of emission reduction. However, few literatures have focused on the impact of the industry coverage in ETS. This paper constructs a recursive dynamic Computable General Equilibrium (CGE) model to simulate the choice of the coverage industries in China’s national ETS in 2017, and explore the impacts of ETS and the most suitable coverage industry for China. The results show that CO2 emission will reach its peak and stabilize by 2030 to meet the goal of “Enhanced Actions on Climate Change: China's Intended Nationally Determined Contributions”. The cumulative CO2 emission will reduce to 12.05 Bt-CO2 in ETS market during 2017–2030. Moreover, commodity prices will increase from 0.12 to 1.64% in different coverage scenarios. Carbon price can be guaranteed within a reasonable range if the rational choice of the Carbon Rights (CR) suppliers and demanders in ETS market is made by the government. This paper suggests that the industry covered in China’s ETS could imitate the patterns of EU Emissions Trading System (period I and period II) and Midwest Greenhouse Gas Reduction Accord in the U.S., or seek another option to balance the demand and supply of CR in ETS market.

The impact of emission trading scheme and the ratio of free quota: A dynamic recursive CGE model in China

To cope with global warming, China has promulgated Enhanced actions on climate change: China’s intended nationally determined contributions and will start the national carbon emissions trading market in 2017. Carbon emissions are distributed by the form of free quota and paid quota. However, few literatures have focused on how the economy and the environment would be changed by the change of free quota ratio. This paper establishes the 10 scenarios of different free quota ratio of carbon emissions rights and uses a dynamic, recursive computable general equilibrium (CGE) model to simulate the carbon emissions trading market, to explore the relationship between free quota ratio and carbon trading price, and the impact of carbon trading scheme (ETS) on China’s economy and environment. The results show that free quota ratio will not have a direct impact on gross domestic product (GDP) and other economic and environment indicators but carbon trading prices. The prices and the rate of free payment in the current pilot cities in China are still relatively conservative. It is possible to reach emission peak, 8.21billion ton, in 2025 and accumulative CO2 reduction from 2017 to 2030 is 20.02billion tons, or 59.60% of 2010 world’s total CO2 emission. Cement, minerals, electricity and nonferrous metals under ETS will suffer great losses, so subsidy should be considered. Finally, we suggested that China should reduce the total carbon rights to increase the carbon price in 2017, and gradually reducing the proportion of free quota, from 90% in 2017 to 50% or less in 2030, by which the peak year of CO2 emission can meet in 2025. We also suggest that ETS is an effective strategy for CO2 reduction and the ratio should be gradually reduced in ETS to prevent violent fluctuation of carbon price in China.

Coal and sustainable energy supply challenges and barriers

Coal is broadly recognized as secure, competitive, diversified, not vulnerable and predictable in price as an energy resource. In the power generation sector, coal is playing a dominant role in the EU-27 with 25% share of the total installed capacity and almost one-third of the power generation. The role played by the domestic resources and especially by coal is increasingly becoming the focus of the EU energy strategy. There is a strong pressure for the decarbonization of the energy mix. The emission trading scheme (ETS) can have an impact on the shift to lower carbon-intensive fuels. The impact of ETS on coal can be important, because it is very short-sighted and only defines the period up to 2008–2012. The ETS carbon dioxide (CO 2) regime must ensure that investments in coal-fired plants in the long term are supported. EU Research Institutes and Coal Industry identified an important CO 2 reduction potential by improving the efficiency of the conversion of solid fuels into electricity. Highly efficient clean coal technologies can contribute to reasonable costs and challenge the issue of climate change. It must be pointed out that the EU Energy Policy should now concentrate on the necessity to effectively support demonstration projects and to create the legal framework for the integrated approach of efficiency enhancement and CO 2 capture and storage (CCS). However, it is not a proper and rational approach to implement CCS before the technology is demonstrated and before it is clear that it will be commercially viable.