National Carbon Trading Market Research Articles

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.

The Impact of Carbon Emissions Trading on the Total Factor Productivity of China’s Electric Power Enterprises—An Empirical Analysis Based on the Differences-in-Differences Model

Based on the panel data of China’s listed electric power enterprises, this paper adopts the differences-in-differences model to empirically analyze the pilot policy of carbon emissions trading’s impact on the total factor productivity of power enterprises in 2013. The study finds that the carbon trading pilot policy has a significant positive effect on the total factor productivity of power companies, and the two possible impact mechanisms are external cost compensation and additional income, and internal low-carbon technology innovation and resource allocation optimization. The conclusions above have been further confirmed by the parallel trend test and robustness test. The heterogeneity analysis demonstrates that there are differences in the regression results between state-owned enterprises and nonstate-owned enterprises. The possible reason is that state-owned enterprises are more likely to be affected by the carbon emissions trading system, and their asset-heavy model puts greater pressure on carbon emission reduction. Therefore, their demand for low-carbon technology innovation is more urgent; areas with stricter carbon emission verification are more sensitive to the implementation of carbon trading, and a reasonable increase in carbon verification can make the carbon trading market more effective. Based on the research results, this paper proposes to speed up the improvement of the national carbon trading market system, enhance the diversity and richness of the main market, improve the liquidity of the carbon trading market, broaden financing channels for electric power enterprises, and improve the carbon market supervision mechanism.

Sustainability of the Food Industry: Ecological Efficiency and Influencing Mechanism of Carbon Emissions Trading Policy in China

As an important factor affecting ecological sustainability, the food industry’s ecological efficiency (EE) deserves great attention and control. In 2013, China implemented a carbon emissions trading policy (CETP) to limit carbon emissions from various industries to promote the optimization of the ecological environment. To explore the ecological sustainability of China’s food industry, identify the factors affecting the EE of the food industry, and study the influence heterogeneity and influencing mechanisms, the impact of the CETP on the food industry, which emits high volumes of greenhouse gasses, requires evaluation. Many scholars have studied the policy’s effect from the perspective of EE, but they have ignored the food industry, which is the main carbon emitting sector, and there is a lack of heterogeneity analyses of the influencing factors. This study reviewed the implementation process and characteristics of the CETP in the past decades. Using provincial panel data from 2003 to 2019, this study measured the EE in the food industry through the difference-in-difference model, evaluated the emission reduction and economic effects of the CETP on the food industry, characterized the heterogeneity of the policy’s effectiveness, and analysed its mechanism using three-stage mediating regression. The results showed that (1) the CETP significantly affected the food industry’s EE, which increased by 38.3% on average in experimental provinces compared with non-experimental provinces. (2) For the food industry, the policy’s effect was most significant in the food manufacturing and tobacco subsectors, and these subsectors in the experimental provinces increased by 66.0% and 39.7%, respectively; meanwhile, the policy’s effect was not significant in agriculture and subsidiary food processing and beverage manufacturing. By industrial area, the policy’s effects were significantly higher in the eastern region compared with the central and western regions. The influence on the food industry’s EE in the eastern region was close to 150%, while in the central and western regions, it was not significant. (3) The CETP promoted the food industry’s EE by improving energy consumption structure and technological innovation. The proportion of coal consumption decreased by 6.34% on average, and the technological innovation level increased by 25.1% on average in the experimental provinces’ food industries. The research findings indicate that the CEPT is a good practice and worth spreading. For food industry enterprises with high carbon emissions, attention should be paid to low-carbon transformation through technological upgrading and management optimization. For policymakers, targeted policies are needed to establish a national unified carbon trading market so that the national carbon emissions can be controlled, and the gap between regional carbon emissions can be narrowed.

Renewable Energy Application and Carbon Redution Study on the Campus Teaching Building

This work conducts carbon simulation and accounting of one public teaching building in South China. The calculation results show that the carbon emission of public teaching building is 2586.5 Tons of CO2 per year. Based on the simulation, Solar Photovoltaic (PV) system can achieve carbon reduction of 595.5 TCO2 per year, the total power of the PV system reaches 1201kWp, the average power generation of the system is 1025MWh/year, and the system efficiency is 68.1%. The PV system can reduce the carbon emissions of public teaching buildings by 23%. The utilization rate of the roof space of public teaching buildings reaches 64%. Based on the simulation results to analyse the models of colleges and universities participating in the carbon trading market, three models are proposed: unified integration into the national carbon trading market system, incomplete integration into the carbon trading market, and the establishment of a university carbon trading market

Forest carbon removal potential and sustainable development in Japan

Forests play a crucial role in mitigating climate change and reducing emissions as a major carbon sink. However, its value in removing carbon dioxide (CO2) from the atmosphere is always underestimated in natural capital (NC) accounting and sustainability assessments. This study predicted Japan’s forest CO2 removal by afforestation and forest management and its monetary value until 2042 from national to gridded level, with statistical data and complementary satellite data products, and explored how that CO2 removal will contribute to sustainable development under the inclusive wealth (IW) framework. The results show that: (1) the annual CO2 removal by forests has the potential to offset 15.3% of the emission and increase NC by 6.8% in Japan, significantly contributing to carbon neutrality and IW growth; (2) the total CO2 removal in exiting forests will peak at around 2030 and then decrease, but expanding afforestation could offset that decrease in later years; (3) the spatial distribution patterns of IW and forest CO2 removal are opposite. This indicates a national carbon trading market could create new wealth for rural communities where vast forests exist, and then effectively balance the inequal urban–rural development in Japan. The explicit spatial information of this study could provide valuable information for differentiating policy priorities of forestry planning and sustainable development in different local communities.

Allocation scheme selection for transportation carbon allowance -evidence from China's top ten economic regions

Establishing a scientific allocation scheme for transportation carbon allowance (TCA) is an inevitable requirement of China's sustainable development. Previous studies on the allocation problems of TCA considered the single goal, but this study constructs an allocation model of TCA under the framework of zero-sum gains data envelopment analysis and a spatial simultaneous panel. Furthermore, a profit maximization function model is used to measure the allocative efficiency and the differences in regional abatement costs of three different transport allocation mechanisms in China's top 10 economic regions from 1998 to 2019. Empirical results revealed four key results. (1) The efficient scheme is beneficial to regions with a high level of economic development and high-carbon emission efficiency, but it is easy to cause widening regional wealth disparities. (2) The equitable scheme is beneficial to regions with low transportation carbon emission efficiency, immature transportation structures, and green transportation technology, but it is easy to cause an unsuitable punishment effect. (3) Compared with the above two schemes, the comprehensive scheme is beneficial to more regions because it can both minimize the average marginal abatement costs and mitigate regional development inequalities. (4) With the gradual improvement of the national transportation carbon trading market, the comprehensive scheme is more sustainable and should be used more in the future. This study contributes to the formulation and implementation of energy allocation policies in the transportation sector.

Analysis on China's provincial carbon emission quota allocation based on bankruptcy game

A reasonable allocation of carbon emission quotas is essential to improving the national unified carbon trading market. A bankruptcy game model is developed for allocating carbon emission quotas to Chinese provinces based on bankruptcy theory and the Nash bargaining game. The model takes into account the disparities that exist among these provinces. The allocation scheme under the carbon peak target can be obtained by using the projection pursuit model and the subject satisfaction function. The findings reveal that certain eastern provinces bear a greater responsibility in terms of historical carbon emissions. Furthermore, the rampant transfer of carbon emissions from energy-rich to energy-demanding regions has exacerbated the imbalance in regional development. Interestingly, the carbon emission demands are fulfilled in some provinces situated in the coastal regions of the southwest and southeast, such as Beijing, Tianjin, and Fujian. However, certain provinces in the northeast express the lowest levels of satisfaction with their carbon quota allocation, necessitating a greater burden of carbon emission reduction in the future. The research offers significant implications for regional development and carbon reduction efforts.

Can China's national carbon trading market hedge the risks of light and medium crude oil? A comparative analysis with the European carbon market

The study explores whether China's national carbon market can hedge the risks of light and medium crude oil compared with the European carbon market, through the diversified and hedging portfolios estimated by the NAGARCHSK-Mixed Copula. The current work confirms the existence of conditional higher moments and asymmetric tail dependence structures in the crude and carbon markets. Furthermore, for all crude oil, although the China's carbon market is slightly inferior to the European carbon market in terms of hedging costs and stability, the hedging effectiveness of the former is better than that of the latter. And Oman crude oil gets better hedging protection from the carbon markets than Brent crude oil. Finally, the diversified portfolios obviously outperform the hedging portfolios in terms of hedging effectiveness.

The Development of China’s Carbon Emissions Regulation System

In the face of climate and environmental problems caused by carbon emissions, China is taking positive actions, such aspromoting the achievement of the emission peak of traditional energy sources, accelerating the optimization of industrial andenergy structures, promoting and improving the construction of the national carbon trading market, increasing investmentand scientific research work to develop new energy sources, and several other actions. The administrative approach plays animportant role in the development of Chinaʼs low-carbon economy. The carbon trading system also greatly promotes energyconservation and emission reduction, contributes to attracting investment in low-carbon technology and transforming theenergy structure and is becoming an important policy guarantee for Chinaʼs carbon emission reduction. However, at thesame time, Chinaʼs carbon trading market faces many practical challenges. For China, the task of reducing carbon emissionsthrough carbon trading alone is unrealistic. Chinaʼs current actions on carbon taxation are not broad enough to regulateemission reductions. With the implementation of carbon trading, there is a need to establish a carbon tax as a policy optionto further strengthen the regulation of emission reduction. The introduction of a carbon tax should consider the relationshipbetween economic and social development and carbon reduction and coordinate the relationship between the carbon tax andcarbon trading system on various aspects, including the field and object of taxation, tax rates, use of tax revenue and therelationship between the authorities regulating the two policies, to leverage their complementary roles.

Grasp the nettle or retreat: Dynamic effects decomposition of carbon trading policies from a spatial perspective

Under the emission reduction pressure of carbon trading policies (CTP), green innovation (GI) and pollution transfer (PT) are both viable options for meeting emission reduction targets. However, the current research has not systematically considered whether GI and PT coexist or whether there are differences in long-term and short-term dynamic decision making. It is crucial to investigate the dynamic effect of CTP on GI and PT. Taking China's CTP as the quasi-natural experiment, and based on Chinese provincial panel data from 2006 to 2019, this study evaluated decomposed the dynamic effects of CTP on GI and PT using a dynamic spatial difference-in-differences (DSDID) model. The results indicate that, (1) after the CTP promulgation, regional GI increased significantly, accompanied by a more obvious improvement in GI level in pilot areas than in non-pilot areas. The PT in the adjacent areas grew faster than PT in the pilot areas. (2) The CTP had significant long-term direct incentive and spatial spillover effects on GI, but also led to a short-term PT under the “pollution haven effect”. After a series of robustness tests, the dynamic effects were still significant. (3) The “competition for innovation (IC)” significantly enhanced the CTP incentive effect on GI under a siphoning effect, and the “competition for economic (EC)” intensified the PT effect caused by CTP because of collective irrational behavior. (4) In the strong GI capacity areas, the incentive effect of CTP on GI was higher than that in weak GI capacity areas, and the effect on PT was more significant. The mixed quota form driving effect on GI was greater than the free quota form, the free quota form had no significant PT effect on neighboring areas, while the mixed quota form led to a greater PT effect. Based on these findings, further put forward to improve the national carbon trading mechanism and market standards; construct a long-term GI incentive mechanism; account for the differences in local policies and regional joint actions on emissions reductions; construct a local government assessment and supervision mechanisms, which provides policy basis for promoting the “dual carbon” goal.

Does carbon emission trading scheme really improve the CO2 emission efficiency? Evidence from China's iron and steel industry

The carbon trading market is an effective way to mitigate the threat of climate warming. In the context of carbon neutrality, what is the carbon emission trading scheme's carbon reduction effect? This paper answers the question by examining the carbon efficiency of China's iron and steel industry. This study first constructs CO2 emission efficiency by employing the data envelopment approach. It then uses the synthetic control method to identify the impact of the carbon emission trading scheme on the CO2 efficiency of the iron and steel industry. The results show that CO2 emission efficiency in pilot provinces increased at a 5% significance level compared with the counterfactual scenario. The carbon trading market plays a vital role in industrial CO2 emission efficiency improvement in Guangdong, Shanghai, Tianjin, Hubei, and Chongqing. From a dynamic perspective, the policy effect of enhancing CO2 efficiency becomes more prominent over time. Moreover, the effectiveness degree of the carbon emission trading scheme varies across pilot provinces, caused of regional policy differences. Based on the findings, we put forward targeted suggestions for improving the newly-established national carbon trading market.

Evolutionary game between government and shipping enterprises based on shipping cycle and carbon quota

With the opening of the national carbon trading market and the coming of the post-epidemic era, the government actively promotes the carbon quota policy to fundamentally achieve carbon emission reduction. This paper corresponds the shipping cycle to the shipping market demand situation during the epidemic, incorporates the shipping cycle characteristics and government quota characteristics into a multi-stage evolutionary game model. Later, the study analyzes the equilibrium points of the game parties at each stage and finally investigates the influence of factors such as technological improvement on the strategy choice of shipping enterprises through sensitivity analysis. The study found that the government’s carbon quota policy is influenced by shipping market demand. During the peak shipping season, the government’s quota policy is binding on shipping enterprises. In the low season of shipping, the binding effect of government’s quota policy on shipping enterprises will be reduced, or even appear to be invalid. Therefore, the government should forecast the demand situation of the shipping market, gradually relax the regulation during the peak season of shipping, and strengthen the regulation before the low season of shipping. Shipping enterprises should increase the research and development of carbon emission reduction technology to reduce carbon emissions from the root to realize the sustainable development of ports and marine-related industries in the post-epidemic era.

A Method for Allocation of Carbon Emission Quotas to Provincial-Level Industries in China Based on DEA

At present, China implements a quota-based trading mechanism to achieve carbon emission reduction, in which the allocation of carbon emission quotas among different provinces is short of considering the influence of unbalanced provincial development. Heterogeneity among the provincial-level three major industries, namely, agriculture, manufacturing and mining, and service industries, is a case in point. To address this insufficiency, this paper proposes a novel parallel data envelopment analysis (DEA) based method for carbon emission quota allocation. The method models each province as a decision-making unit (DMU) and the provincial-level three major industries as parallel sub-decision-making units (SDMUs). A distinguished feature of the method is that it makes explicit tradeoffs between efficiency and equality considerations for policymakers in allocating the carbon quotas among three heterogeneous provincial-level major industries. The empirical results show that the proposed method effectively improves the overall provincial gross domestic product (GDP) potentials through the reallocation of carbon quotas among industries while the equality level is not worse off. This work is helpful for policymakers to achieve a long-term emission reduction target and provides suggestions for improving the initial allocation mechanism of a national carbon trading market.

Feasibility Study of China’s Carbon Tax System under the Carbon Neutrality Target—Based on the CGE Model

In order to cope with the climate problem of global warming and respond to the call of the United Nations to reduce carbon emissions, China has put the goals of carbon peaking in 2030 and carbon neutrality in 2060 forward and has promoted the transformation and upgrading of the economic development mode and the green, low-carbon development path. In international practice, various countries have widely adopted the carbon trading market and tax policy as effective carbon emission reduction mechanisms and tools. In 2012, China implemented a carbon trading pilot project and established a national unified carbon trading market in 2021 based on accumulated experience, but the carbon tax has not yet been introduced. According to the international carbon tax practice and the current situation in China, the introduction of the carbon tax is conducive to the establishment of a sound carbon emission reduction system and the promotion of green and low-carbon development from the macro-control level. In this paper, we analyzed the necessity and theoretical research of carbon tax policy in China and explored the feasibility of a carbon tax in China by combining the internationally advanced carbon tax practice. By establishing a CGE model at the carbon-tax level and using the social accounting matrix (SAM) as the database, we simulated the impact of implementing carbon tax policies under different carbon tax prices on China’s environmental and economic benefits and whether the double-dividend effect of a carbon tax can be effectively realized. The results show that the carbon tax will help reduce carbon emissions and significantly affect carbon reduction. However, in the short term, it has a negative effect on economic development. Accordingly, it is suggested that a scientific carbon tax system should be established according to national conditions, and a carbon tax should be introduced at a lower carbon tax price. The carbon tax should be supplemented by carbon tax subsidies to ensure effective carbon emission reduction so as to alleviate the inhibiting effect on economic development. At the same time, the compound carbon emission reduction mechanism of carbon trading and tax should be improved to lay the institutional foundation for the early realization of the carbon neutrality target.

Efficiency vs. equity as China's national carbon market meets provincial electricity markets

Emissions reduction in the electricity sector is critical in achieving China's carbon neutrality target. While a national carbon trading market that covers the electricity sector has been established, its effectiveness depends on how this sector evolves into being a more integrated market. This study evaluated the impact of China's electricity market integration on the cost-effectiveness of carbon pricing. An integrated (regional electricity market) and a segmented (provincial electricity market) market scenario were used to identify possible reform paths going forward. Using high-frequency datasets of the five southern provinces in 2018, we assessed the impact of electricity market integration on the abatement potential and cost-effectiveness of carbon pricing. We found that carbon prices need to be as high as 200 yuan/ton to begin achieving overall carbon reduction. In this context, the regional market is more cost-effective in reducing emissions than the provincial one, as the abatement costs are saved by around 60% compared to the latter under the same emission reduction targets. However, the regional market may also raise potential equity issues. The provincial-level distribution of carbon emission reductions, as well as the withdrawal of coal power, are more concentrated in the regional market than in the provincial one, which indicates an inequitable social-economic-environmental impacts of market integration. Our research findings would help to improve policymakers' understanding of the interaction between carbon pricing and electricity market reforms. This would then assist them in coordinating an effective design of both the carbon and electricity markets, in addition to supporting China's carbon neutrality target.

The impact of carbon finance on energy consumption structure: evidence from China.

As a financial innovation model to promote sustainable economic development, carbon finance promotes green and inclusive economic development by reshaping the financial system. As a big energy consumer, China has been committed to the green transformation of energy structure, and carbon finance has been regarded as an important tool to support carbon emission reduction. This paper divides carbon finance from three levels, financial macro, environmental governance, and technological development, and selects 17 indexes to measure the development level of carbon finance in China. Time series regression model and the entropy weight method (EWM) are used to analyze the impact of carbon finance on China's energy consumption structure. The empirical results show that carbon finance plays a positive role in promoting China's energy consumption structure, and developing carbon finance is conducive to the use of clean energy and the optimization of energy consumption structure in China; carbon finance can further optimize China's energy consumption structure by investing capital, resources, and technology in industries related to promoting clean energy consumption. Therefore, China should continue to develop carbon finance and promote the establishment of a unified national carbon trading market; at the same time, China should use the CCER trading mechanism to promote the development of renewable energy and enhance the endogenous driving force of energy transformation by promoting technological progress.

Dynamic Scenario Analysis of Science and Technology Innovation to Support Chinese Cities in Achieving the "Double Carbon" Goal: A Case Study of Xi'an City.

Since the Chinese government proclaimed the "double carbon" goal in 2020, carbon emissions reduction has become an important task for the Chinese government. Cities generate more than 60% of carbon emissions. There are many challenges in achieving the "double carbon" goal for the cities of China. Science and technology innovation (STI) provides a feasible path, and the mechanism of STI influencing carbon emissions is analyzed. The STI factors, economic factors, energy factors, and population factors are studied based on the generalized Divisia index method. According to the decomposing results, science and technology innovation investment is the most important increasing factor in carbon emissions, and technology innovation investment efficiency is the most important decreasing factor, respectively. Three scenarios are set up and simulated with Monte Carlo technology evaluating the city of Xi'an in China. Under the baseline development scenario, it cannot achieve the carbon peak goal, and the uncertainty of carbon emissions increases. Under the green development scenario, it will peak in 2051, with a 95% confidence interval of 6668.47-7756.90 × 104 tons. Under the technology breakthrough scenario, the lower and median boundaries of carbon emissions peak at 4703.94 × 104 tons and 4852.39 × 104 tons in 2026, and the upper boundary peaks at 5042.15 × 104 tons in 2030. According to the Environmental Kuznets Curve theory, it will peak between 2028 and 2029 with a GDP per capita of CNY 153,223.85. However, it will fail to achieve the carbon neutrality goal by 2060, and should rely on the national carbon trading market of China to achieve the goal with a trading volume of 2524.61-3007.01 × 104 tons.

What Is the Policy Effect of Coupling the Green Hydrogen Market, National Carbon Trading Market and Electricity Market?

Green hydrogen has become the key to social low-carbon transformation and is fully linked to zero carbon emissions. The carbon emissions trading market is a policy tool used to control carbon emissions using a market-oriented mechanism. Building a modular carbon trading center for the hydrogen energy industry would greatly promote the meeting of climate targets. Based on this, a “green hydrogen market—national carbon trading market–electricity market” coupling mechanism is designed. Then, the “green hydrogen market—national carbon trading market–electricity market” mechanism is modeled and simulated using system dynamics. The results are as follows: First, coupling between the green hydrogen market, carbon trading market and electricity market can be realized through green hydrogen certification and carbon quota trading. It is found that the coupling model is feasible through simulation. Second, simulation of the basic scenario finds that multiple-market coupling can stimulate an increase in carbon price, the control of thermal power generation and an increase in green hydrogen production. Finally, the proportion of the green hydrogen certification, the elimination mechanism of outdated units and the quota auction mechanism will help to form a carbon pricing mechanism. This study enriches the green hydrogen trading model and establishes a multiple-market linkage mechanism.

The Future of Quasi Emission Control Enterprises in a Low-Carbon Economy

At 9:30 a.m. on July 16, 2021, the national carbon emission trading market started operation at Shanghai Environment and Energy Exchange. On the first day, the carbon emission quota totaled 4.244 million tons, with a turnover of 210 million yuan and an average transaction price of 51.23 yuan/ton. The carbon trading price is on the rise. With the gradual maturity and improvement of conditions, there will be about 8,000 to 10,000 emission control enterprises under the eight major industries in the future, and China’s carbon market will become the largest market covering greenhouse gas emissions worldwide. It can be seen that carbon trading is a “big deal.” If enterprises participate well, they will form carbon assets, but if they do not participate well, they will form carbon liabilities. This paper analyzes the opportunities and challenges faced by quasi emission control enterprises under the background of low-carbon economy. This provides certain reference significance for these enterprises to actively participate in the national carbon trading market in the future.

탄소배출권거래정책이 산업구조 개선에 미치는 영향과 메커니즘에 관한 연구

The disorderly increase in carbon emissions has led to increasingly serious climate problems. The Chinese government has scientifically introduced and implemented carbon emission trading policies to achieve the “doublecarbon” goal. This paper uses DID (difference-in- difference), based on the 2010~2019 urban panel data, and empirically study the effect of the carbon emission trading policy on the urban industrial structure. The empirical results show that the carbon emission trading policy can effectively promote the optimization of urban industrial structure; The effects of carbon emission trading policies show significant heterogeneity among different regions.
 At the level of municipalities directly under the central government, the effects of carbon emission trading policies in Beijing and Shanghai are significantly better than those in Tianjin and Chongqing, and the effects of carbon trading policies in eastern China are better than those in central and western China; The further analysis shows that technological innovation, foreign investment and human resources influence the optimization of urban industrial structure. This study provides a new idea for building a national carbon trading market, optimizing the urban industrial structure, and realizing green economic development.