Investments In Low-carbon Technologies Research Articles

Socio-economic constraints to low-carbon transitions: insights from Kazakhstan’s Emissions Trading Scheme

ABSTRACT In this research, we examine energy facilities’ (both electricity and heat) responses to emissions trading in Kazakhstan, a fossil-fuel-dependent developing country, to understand why facilities have delayed the adoption of substantial carbon mitigation measures. Our research relies on the frameworks of sociotechnical systems (STS) and firm-level exploration-exploitation trade-offs (EET) because energy transitions are dependent on firm-level characteristics as well as industry – and society-level environments. We find poorly designed and inconsistent regulations, ambivalence to the carbon emissions, challenges from vested interests, energy security regulations and desire for stable socio-economic conditions to be the main society-level factors impeding the effectiveness of the Kazakhstan Emissions Trading Scheme (KazETS). The main industry-level factors hindering the KazETS were found to be the involvement of the state-owned enterprise (SOE) Samruk Energo which accesses government funding for coal-based facility investment, abundant coal reserves that are extracted at low cost, increasing costs and decreasing quality of fuel, relatively very high cost of natural gas, increasing demand for electricity and heat, lack of market competition and no international firms operating in energy generation. Finally, the main firm-level factors restricting investment in low-carbon technologies are low market incentives for investment to replace technologically obsolete assets, the lack of firm-level carbon strategies and very low capacity of workers.

The Impact of Carbon Emission Quota Allocation Regulations on the Investment of Low-Carbon Technology in Electric Power Industry Under Peak-Valley Price Policy

This article focuses on carbon emission quota allocation regulations and their impact on investments in low-carbon technology within the electric power industry, as well as other enterprises’ decisions and profits under peak-valley price policy and cap-and-trade mechanism. An electricity supply-chain model is constructed in a Stackelberg game, which comprises an electricity-generating enterprise (leader) and an electricity retailer (follower). The backward-induction method is used to obtain the investment in low-carbon technology and electricity price under three scenarios of carbon emission quota allocation regulations: no regulation, grandfathering allocation, and benchmarking allocation. The main results are: first, benchmarking allocation always results in higher investment in low-carbon technology, but generates greater total carbon emissions than grandfathering allocation under most conditions; and second, under benchmarking allocation, as the unit carbon emission quota increases, total carbon emissions first increase and then decrease. Therefore, benchmarking allocation is the better regulation for the low-carbon technology investment. Moreover, benchmarking allocation is also the better regulation for total carbon emissions with a higher unit carbon quota or a higher carbon price.

ESG criteria in green rebuilding of Ukraine

The historical retrospective of the construction industry shows a tendency to move to a qualitatively new level after crises and global upheaval. Global markets are currently being reformatted to reflect new investment priorities, where environmental, social and governance (ESG) criteria are gaining essential importance, and Ukraine is at the center of global transformations. Ukraine's post-war reconstruction plans include the use of green innovative technologies, as the formation of a green economy is the basis of the European Union Association Agreement. The concept of "green recovery" has become widespread, as investments in low-carbon technologies strengthen the country's resilience. Implementation of green building principles saves resources and energy, stimulates innovation and competitiveness, and increases the confidence of investors and increasingly conscious consumers. Current international trends are moving towards global decarbonization of the world economy and the widespread implementation of ESG non-financial reporting standards to screen and increase transparency of business. The construction sector plays a key role in achieving the Sustainable Development Goals, given the significant economic, environmental and social impacts of the construction industry. The requirements for decarbonization, safety and well-being of buildings are growing, and the increasing volume and complexity of data requires new tools and approaches. The application of ESG principles involves the creation of long-term sustainable value in the interests of the company and its stakeholders. In the construction sector, ESG factors are crucial for determining the overall value and potential of a property, which helps investors to obtain more information for decision-making and risk assessment. The use of (ESG) indicators ensures transparency, objectivity and measurability of the company's performance. Businesses that demonstrate concrete commitments to sustainable development will become undisputed leaders in their industries in the next 30 years and will gain access to investment capital. On the other hand, companies that do not take care of compliance with international standards in a timely manner risk losing business in the medium term.

The Nexus of COVID-19 and Climate Change: A Systematic Literature Review

Abstract Since the onset of the COVID-19 pandemic, many studies have appeared on how it will affect climate change and policy, and vice versa. In this study, we systematically review the literature about this relationship. We obtained a sample of 204 articles published in the period from February 2020 to March 2022. Using topic modelling and qualitative analysis, we identify seven main topics on the nexus of COVID-19 and climate change: (1) impacts of COVID-19 on climate change and policy; (2) sustainable recovery after COVID-19; (3) public concern about climate change and COVID-19; (4) lessons from COVID-19 for climate change action; (5) effects of COVID-19 and climate change on the economy, food security and poverty; (6) collective responses to crises and (7) similarities and differences between COVID-19 and climate change. We discuss lessons derived from each of these topics and identify key policies and strategies for a sustainable recovery from COVID-19. Investments in low-carbon technologies and carbon taxation are the most commonly suggested policy solutions. If climate targets are to be met, climate action needs to be the focus of COVID-19 recovery.

Putting nuclear waste on the sustainability agenda – integration into the concept of planetary boundaries

Abstract. One part of sustainability discussions is the debate about the ecological carrying capacity of the Earth, which was initiated in the year 2009 by a group of scientists led by Johan Rockström, who proposed the concept of “planetary boundaries” (Rockström et al., 2009). The concept defines limits of the ecological carrying capacity based on scientific findings and on the application of the precautionary principle. Since then environmental and sustainability policies have increasingly referred to the concept as a global framework, as done, for example, by the Stakeholder Forum for a Sustainable Future (United Nations Department of Economic and Social Affairs, 2012) and the EU's 8th Environmental Action Program, which calls for “a systematic change to a Union economy that ensures well-being within planetary boundaries” (European Parliament and Council of the European Union, 2022, p. 24). As one of the nine boundaries, climate change requires strong decarbonization and has led to increased investments in low-carbon technologies. Hereby, nuclear power generation gains a new momentum for newly-built reactors as well as lifetime extensions due to its low-emission character required for climate change mitigation (MIT, 2018; Cometto et al., 2022). Furthermore, the EU taxonomy has set nuclear power as a “sustainable” technology classifying it as a “green” investment (JRC, 2021). Although no greenhouse gas emissions are produced during nuclear fission, it produces another form of hazardous and long-lasting waste through spent fuel accumulation. In this sense, human-made nuclear fission is also an anthropogenic impact, which increases the number of instable isotopes representing a persistent threat to humankind and ecosystems. Although the planetary boundary concept has briefly mentioned radioactive waste as being part of other toxic and human-made waste under the category “novel entities”, it has not been further elaborated since the introduction of the framework (Steffen et al., 2015; Persson et al., 2022). Instead, other forms of human-made waste such as plastics have been analyzed and quantified (Persson et al., 2022). The aim of the workshop is to discuss the role of radioactive waste management in the context of planetary boundaries from the perspective of the various disciplines of the workshop attendees. Therefore, the concept of planetary boundaries will be introduced and a global perspective on radioactive waste accumulation will be set. In small groups the workshop attendees will work on single aspects, such as reviewing the provided arguments and whether their suitability meets the criteria to establish nuclear waste as a control variable for the novel-entity boundary. The workshop can also include considerations about possible indicators and challenges for quantification as well as address the debate on whether radioactive waste may also become a resource for future generations. Finally, groups will present their results in front of the plenum and discuss the global perspective and its implications for radioactive waste management and challenges for the sustainability discourse in science and policy. To provide a balanced and interdisciplinary discourse we will invite a few speakers, who will provide input statements, and other experts in the field. It is envisaged to provide a paper with background information and data necessary to discuss radioactive waste as a planetary concept. This preliminary work serves as a basis for discussion for the workshop.

Study on Low-Carbon Technology Investment Strategies for High Energy-Consuming Enterprises under the Health Co-Benefits of Carbon Emission Reduction

The excessive use of fossil energy has led to a yearly increase in carbon dioxide and atmospheric pollutant emissions, and climate change has become increasingly prominent, seriously affecting people’s daily lives and physical and mental health. According to statistics, rising temperatures and extreme weather phenomena due to climate change have led to a 68% increase in heat-related deaths today compared to the period between 2000 and 2004, and a 61% increase in the number of days humans face high fire risks in the same period. Currently, in order to achieve synergistic economic and environmental development and enhance the health co-benefits of carbon emission reduction, it is urgent for high-energy-consuming enterprises to make sound low-carbon technology investment decisions. Therefore, in this paper, under the carbon quota and trading policy and carbon tax policy, and considering the existence of low-carbon preferences of consumers, the financial constraints of upstream high energy-consuming enterprises and sufficient funds of downstream retailers, a low-carbon technology investment decision model under intra-supply chain financing is constructed using Stackelberg game theory. Moreover, by applying the inverse induction method, we solve the optimal decision of low-carbon technology investment with three different subsidy methods: no subsidy, cost subsidy and product subsidy. Finally, the validity of the model is verified by numerical simulation, and the effects of different influencing factors on low-carbon technology investment are analyzed. The results show that: (1) the reasonable formulation of carbon trading price, carbon tax rate, cost subsidy ratio and product subsidy coefficient are important factors to promote enterprises’ low-carbon technology investment; (2) the improvement of consumers’ low-carbon preference level and the reduction in repayment interest rate can promote enterprises’ investment; (3) compared with no subsidy, cost subsidy and product subsidy can effectively improve enterprises’ low-carbon technology investment enthusiasm, and the effect of product subsidy is better than that of cost subsidy. The effect of product subsidies is better than that of cost subsidies. This paper aims to provide suggestions for the government to refine low-carbon technology investment incentive policies and for enterprises to optimize low-carbon technology investment decisions, so as to enhance the healthy co-benefits of carbon emission reduction and achieve green and sustainable economic development.

Rethinking the Low-carbon Transformation of Resource-based Cities Under Net-zero Emission Targets: A Case-study Analysis of Four Resource-based Cities

Objective: Over 120 countries have set or are considering net-zero emissions or neutrality targets. Under the targets, it is necessary to rethink the low-carbon transformation path for resource-based cities, often regarded as incompetent to transition to net-zero directly. Therefore, this paper attempts to summarize the general frame for low-carbon transformation in resource-based cities. Methods: In this paper, we build a Solow growth model with carbon emission constraints to theoretically analyze the possible path of low-carbon transformation for cities. Then we analyze four typical cities in Japan, Germany, Britain, and America. Results: The results of theoretical analysis indicate that industrial structure, technological innovation, and clean energy are the key factors for resource-based cities to move towards zero carbon. In addition, the case analysis results show that the authorities of the four cities adopted policies of industry structure adjustment, energy consumption structure adjustment, and urban environment management to achieve the low-carbon transition. The results further validate the conclusions of the theoretical analysis. Conclusion: Finally, we propose a general framework for resource-based urban transformation. Additionally, we suggest that urban authorities adjust their layout of emerging industries to local conditions, increase investment in low-carbon technologies (especially clean energy), and actively take the lead in environmental governance.

Financing renewable energy: policy insights from Brazil and Nigeria

BackgroundAchieving climate targets will require a rapid transition to clean energy. However, renewable energy (RE) firms face financial, policy, and economic barriers to mobilizing sufficient investment in low-carbon technologies, especially in low- and middle-income countries. Here, we analyze the challenges and successes of financing the energy transition in Nigeria and Brazil using three empirically grounded levers: financing environments, channels, and instruments.ResultsWhile Brazil has leveraged innovative policy instruments to mobilize large-scale investment in RE, policy uncertainty and weak financing mechanisms have hindered RE investments in Nigeria. Specifically, Brazil’s energy transition has been driven by catalytic finance from the Brazilian Development Bank (BNDES). In contrast, bilateral agencies and multilateral development banks (MDBs) have been the largest financiers of renewables in Nigeria. Policy instruments and public–private partnerships need to be redesigned to attract finance and scale market opportunities for RE project developers in Nigeria.ConclusionsWe conclude that robust policy frameworks, a dynamic public bank, strategic deployment of blended finance, and diversification of financing instruments would be essential to accelerate RE investment in Nigeria. Considering the crucial role of donors and MDBs in Nigeria, we propose a multi-stakeholder model to consolidate climate finance and facilitate the country’s energy transition.

Timing Decision of Low-Carbon Technology Investment Adoption by High Energy Consuming Enterprises under Carbon Trading and Subsidies.

Although government subsidies provide some financial support for firms to invest in low-carbon technologies, carbon price fluctuations bring greater uncertainty risks to firms' investment. The paper constructs a real option model to analyze the timing of low-carbon technology adoption between upstream dominant high energy consuming firms and downstream retailers in case of collaborative decision-making and Stackelberg game, and a numerical simulation is conducted to analyze factors affecting the timing for low-carbon investment. We find that the proportion of cost subsidies, carbon price volatility, carbon emission reduction rate, and cost-sharing ratio will affect firms to choose the optimal investment opportunity.

Unburnable Fossil Fuels and Climate Finance: Compensation for Rights Holders

Abstract To limit the increase in global mean temperature to 1.5°C, CO2 emissions should be capped at 440 gigatons. To achieve this, about 89 percent, 59 percent, and 58 percent of existing coal and conventional gas and oil reserves, respectively, need to remain unburned. This implies an economic cost for fossil fuel rights owners, and any successful climate policy will rely on resolving the distributional challenge of how to allocate the right to use the remaining burnable reserves. We discuss the possibility of compensating rights holders of unburnable oil and gas reserves, producing the first estimates of the financial resources needed to secure full compensation. We estimate that approximately US$ 5,400 billion (109) would be needed. Despite the vast amounts required, compensation is nevertheless economically feasible. We suggest a Keynesian “whatever it takes” approach for climate action, combining partial compensation for unburnable fuels and investment in low-carbon technologies to drastically reduce emissions in the rapidly closing window of opportunity before 2030.

Multinationals, research and development, and carbon emissions: international evidence

ABSTRACT We investigate the relationship between research and development (R&D) and firm-level carbon emissions to determine whether firm type matters. Multinational corporations (MNCs) with high-level R&D expenditure have a greater ability than domestic companies to generate technologies that will contribute to controlling environmental pollution and climate change. However, we know less about whether MNCs contribute to reducing carbon emissions worldwide, because they also have the ability to overcome controls on pollution levels by shifting their production facilities from regions with more restrictions to those with fewer restrictions. The sample we use includes roughly 20,000 firm-year observations from 44 countries for the period 2003-2019. We find that MNCs decrease their carbon emissions by increasing their R&D spending more than domestic companies do. We further demonstrate that foreign direct investment (FDI) creates opportunities for MNCs to adjust their overall carbon emissions if they are located in developed countries. Key policy insights R&D investment in low-carbon technologies and practices decreases carbon emissions intensity and the impact on average is larger for MNCs than for domestic companies, showing that firm-type matters to emission reduction outcomes. MNCs manage their geographically diversified production so as to avoid reducing overall net global carbon emissions. MNCs may seek to operate in places that are weaker in enforcement of emissions reduction, which in turn raises their net global carbon emissions. MNCs located in developed countries are comparatively more important as corporate actors to drive carbon emission reductions due to changing location of operations.

Energy Transitions: The Case of Greece with a Special Focus on the Role of the EU ETS

Major energy transitions are associated not only with fundamental transformations of the energy sector but also with multidimensional changes in societies. Existing energy systems are heavily implicated in climate change. This paper investigates from an ecosocialist perspective the prevalent high-carbon energy systems in capitalism and their ongoing transformations, with a special focus on Greece as an EU member. Furthermore, it explores whether the EU ETS, in comparison to renewable energy sources (RES) support schemes, created considerable incentives for effective and socially fair transitions to low-carbon systems. Empirical data reveals the enduring high-carbon composition of gross inland energy consumption in Greece while evidence on gross electricity generation by fuel discloses the limited penetration of RES since 1990. The neoliberal design of ETS at the EU level and its poor workings did not induce investments in low carbon technologies. RES support policies have been more significant. However, both have adverse distributional effects, especially on working people since the latter bear the cost of transition for the most part. Effective and fair low-carbon energy transitions need radical social transformation — an ecosocialist path out of capitalism.

The deeper the better? A thermogeological analysis of medium-deep borehole heat exchangers in low-enthalpy crystalline rocks

The energy sector is undergoing a fundamental transformation, with a significant investment in low-carbon technologies to replace fossil-based systems. In densely populated urban areas, deep boreholes offer an alternative over shallow geothermal systems, which demand extensive surface areas to attain large-scale heat production. This paper presents numerical calculations of the thermal energy that can be extracted from the medium-deep borehole heat exchangers in the low-enthalpy geothermal setting at depths ranging from 600 to 3000 m. We applied the thermogeological parameters of three locations across Finland and tested two types of coaxial borehole heat exchangers to understand better the variables that affect heat production in low-permeability crystalline rocks. For each depth, location, and heat collector type, we used a range of fluid flow rates to examine the correlation between thermal energy production and resulting outlet temperature. Our results indicate a trade-off between thermal energy production and outlet fluid temperature depending on the fluid flow rate, and that the vacuum-insulated tubing outperforms a high-density polyethylene pipe in energy and temperature production. In addition, the results suggest that the local thermogeological factors impact heat production. Maximum energy production from a 600-m-deep well achieved 170 MWh/a, increasing to 330 MWh/a from a 1000-m-deep well, 980 MWh/a from a 2-km-deep well, and up to 1880 MWh/a from a 3-km-deep well. We demonstrate that understanding the interplay of the local geology, heat exchanger materials, and fluid circulation rates is necessary to maximize the potential of medium-deep geothermal boreholes as a reliable long-term baseload energy source.

Analyzing the Macro-Economic and Employment Implications of Ambitious Mitigation Pathways and Carbon Pricing

The recent EU Green Deal puts forward ambition climate targets aiming to make the EU the first climate neutral continent by mid-century while ensuring a just transition. This requires a large-scale transformation of the EU and global energy and economic systems induced by both regulatory and market-based policies, in particular carbon pricing. Macro-economic models currently used for the analysis of climate policy impacts need improvements to consistently capture the transition dynamics and challenges. The study presents the methodological enhancements realized in general equilibrium model GEM-E3-FIT (including enhanced energy system representation, low-carbon innovation, clean energy markets, technology progress, policy instruments) to improve the simulation of the impacts of ambitious climate policies. The model-based analysis shows that high carbon pricing has limited negative impacts on the EU GDP and consumption, while leading to an economy transformation toward a capital-intensive structure triggered by increased investment in low-carbon technologies and energy efficient equipment. Global decarbonization to achieve the well-below 2°C goal of the Paris Agreement will modestly impact total employment, but its effects are pronounced on specific sectors which are impacted either negatively (e.g., supply of fossil fuels, energy intensive industries) or positively by creating additional jobs (e.g., low-carbon manufacturing, electricity sector).

Towards net-zero emission power system: Deploy long-duration electricity storage technology for power systems with high penetration of renewables

In a system with a high number of renewable energy sources, some capacities are expected to be firm, controllable, large scale, and long durational to meet balanced energy and low-carbon demands. Due to such requirements, flexible technologies such as demand response, short-duration storage, and other forms of energy storage (e.g., hydrogen and thermal storage) are emerging; however, little is known regarding the system benefits of long-duration electricity storage or the optimal energy storage portfolio. Pudjianto and Strbac from Imperial College London have filled this gap by analyzing the role and quantifying the value of long-duration electricity storage in facilitating a cost-effective transition to a low-carbon energy system. Their research illustrates the importance of energy storage in influencing long-term system development and enabling a more efficient investment in low-carbon technologies. Most of the benefits are derived from the savings in low-carbon generation investments.

An evolutionary analysis of low-carbon technology investment strategies based on the manufacturer-supplier matching game under government regulations.

Developing a low-carbon economy is the only way for countries to achieve sustainable development. Carbon emission reduction policies and low-carbon technology (LCT) innovation play key roles in developing low-carbon economy. Under government reward and punishment regulations, based on the bilateral matching and evolutionary theories, this paper constructs an evolution model consisting of a manufacturer investing LCT and a supplier offering LCT to analyze multi-phase LCT investment strategies. Firstly, the profit optimization model of a green supply chain is constructed from the perspectives of centralized-matching (CM), decentralized-matching (DM), and mismatching (MM), and the spatial information internal evolution law of multi-phase LCT investment is described by the Markov chain. Then, a bilateral matching algorithm is proposed to solve the equilibrium solutions, and the evolution process of the three modes is analyzed by numerical simulation. Finally, based on the product green degree, we analyze the impact of subsidies and taxes on investment-production decisions. Analytical results show that the matching mechanism proposed in this paper can help supply chain firms to obtain stable matching and has a significant effect on the realization of "triple wins" of society, economy, and environment. The investment utility of CM is higher than that of DM and MM. Manufacturers are inclined to adopt LCT, and the investment level tends to be stable over time. Government reward and punishment regulations are helpful to motivate supply chain firms to invest in LCT, and the synergistic effect of subsidies and taxes is better than that of a single policy.

Financing the Transition Toward Carbon Neutrality—an Agent-Based Approach to Modeling Investment Decisions in the Electricity System

Transitioning to a low-carbon electricity system requires investments on a very large scale. These investments require access to capital, but that access can be challenging to obtain. Most energy system models do not (explicitly) model investment financing and thereby fail to take this challenge into account. In this study, we develop an agent-based model, where we explicitly include power sector investment financing. We find that different levels of financing constraints and capital availabilities noticeably impact companies' investment choices and economic performances and that this, in turn, impacts the development of the electricity capacity mix and the pace at which CO2emissions are reduced. Limited access to capital can delay investments in low-carbon technologies. However, if the financing constraint is too relaxed, the risk of going bankrupt can increase. In general, companies that anticipate carbon prices too high above or too far below the actual development, along with those that use a low hurdle rate, are the ones that are more likely to go bankrupt. Emissions are cut more rapidly when the carbon tax grows faster, but there is overall a greater tendency for agents to go bankrupt when the tax grows faster. Our energy transition model may be particularly useful in the context of the least financially developed markets.

Socio-technical modeling of smart energy systems: a co-simulation design for domestic energy demand

To tackle the climate crisis, the European energy strategy relies on consumers taking ownership of the energy transition, accelerating decarbonisation through investments in low-carbon technologies and ensuring system stability and reliability by actively participating in the market. Therefore, tools are needed to better understand an increasingly complex and actor-dense energy system, tracking socio-technical dynamics that occur at its margins and then predicting the effects on larger scales. Yet, existing domestic energy demand models are not flexible enough to incorporate a wide range of socio-technical factors, and to be incorporated into larger energy system simulation environments. Here, a co-simulation design for domestic energy demand modeling is presented and motivated on the basis of four design principles: granularity, scalability, modularity and transparency. Microsimulation of domestic energy demand, through the Python open source library demod, shows that it is possible to achieve high detail and high temporal resolution without compromising scalability. Furthermore, mosaik, an open source co-simulation framework, makes it possible to generate, integrate and orchestrate a multitude of demod-based instances with other independent models, which for the illustrative purposes of this study are represented by a heat pump model. The authors hope that the detailed documentation of the proposed solution will encourage interdisciplinary and collaborative efforts to develop a simulation ecosystem capable of investigating alternative energy transition pathways and evaluating policy interventions through the socio-technical lens.

A comparative analysis of green financial policy output in OECD countries

The mitigation of dangerous climate change requires massive investments in low-carbon technologies. Accordingly, the redirection of finance flows is a key objective of the Paris Agreement, and countries have started to enact policies to influence financial actors to this end. However, transparency on such policies is low, and it is hardly possible to compare policy activity internationally. To fill this gap, here we present a comparative analysis of green financial policy output in OECD countries from 2001 to 2019, based on a newly compiled inventory of 136 policies from 29 countries and the European Union. We show that policy output accelerated rapidly since the Paris Agreement, with countries implementing 3.3 policies on average using various governing resources. Key instruments include carbon disclosure requirements, low-carbon investment policies for public funds, and green state investment banks. However, there are huge differences in policy output between countries, and some countries that host important financial centers have implemented few policies to date. On the basis of our results, we develop a research agenda to deepen the understanding of this important but little-studied area of climate policies.

How to design emission trading scheme to promote corporate low-carbon technological innovation: Evidence from China

The appropriate design of the emission trading scheme (ETS) plays a crucial role in promoting companies to conduct low-carbon technological innovations. Based on a questionnaire survey, this paper examines how the design of the ETS and identified determinants have impacted corporate low-carbon technological investment decisions. The data was collected from 99 companies in the eight areas that are implementing the ETS in China. The results indicate that five attributes significantly influence the possibility of corporate investments in low-carbon technologies and thus need more attention in designing the national ETS, including allowance allocation for existing installations, compliance period, allowance allocation for new entrants, allowance banking and policy stability. From the viewpoint of the surveyed companies, the ETS that allocates allowances for existing installations based on the benchmark, has a long compliance period, allocates allowances for new entrants based on a uniform benchmark and allows companies to bank allowances could effectively encourage companies to conduct the low-carbon technological investment. The results of this study are important in light of ongoing discussions and developments of the national ETS in China.