IDEAS home Printed from https://ideas.repec.org/a/bla/chinae/v31y2023i3p92-114.html
   My bibliography  Save this article

Impacts of Market‐based Environmental Regulation on Green Total Factor Energy Efficiency in China

Author

Listed:
  • Ge Li
  • Da Gao
  • Yi Li

Abstract

This study employed a difference‐in‐differences design to assess the effect of market‐based environmental regulation on green total factor energy efficiency (GTFEE) in a quasi‐natural experiment that investigated China's carbon emissions trading scheme (ETS). The empirical results show that ETS had a positive effect on GTFEE. A series of robustness tests revealed that the results were robust. Potential mechanisms through which ETS can improve GTFEE include the promotion of technological innovation and the upgrading of industrial structure. The positive effects varied in different cities and different regions – the result was pronounced in eastern China and developed cities, but it was insignificant in central and western areas and developing cities. This study confirms the satisfactory performance of China's ETS in improving GTFEE, and this is relevant for other emerging countries.

Suggested Citation

  • Ge Li & Da Gao & Yi Li, 2023. "Impacts of Market‐based Environmental Regulation on Green Total Factor Energy Efficiency in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(3), pages 92-114, May.
    • Handle: RePEc:bla:chinae:v:31:y:2023:i:3:p:92-114
    DOI: 10.1111/cwe.12485
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/cwe.12485
    Download Restriction: no
    File URL: https://libkey.io/10.1111/cwe.12485?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Guo, Ran & Yuan, Yijun, 2020. "Different types of environmental regulations and heterogeneous influence on energy efficiency in the industrial sector: Evidence from Chinese provincial data," Energy Policy, Elsevier, vol. 145(C).
    2. Georgia Makridou & Michael Doumpos & Emilios Galariotis, 2019. "The financial performance of firms participating in the EU Emissions Trading Scheme Energy Policy," Post-Print hal-02013153, HAL.
    3. Liu, Qing & Qiu, Larry D., 2016. "Intermediate input imports and innovations: Evidence from Chinese firms' patent filings," Journal of International Economics, Elsevier, vol. 103(C), pages 166-183.
    4. Albrizio, Silvia & Kozluk, Tomasz & Zipperer, Vera, 2017. "Environmental policies and productivity growth: Evidence across industries and firms," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 209-226.
    5. Hu, Jiangfeng & Pan, Xinxin & Huang, Qinghua, 2020. "Quantity or quality? The impacts of environmental regulation on firms’ innovation–Quasi-natural experiment based on China's carbon emissions trading pilot," Technological Forecasting and Social Change, Elsevier, vol. 158(C).
    6. Makridou, Georgia & Doumpos, Michalis & Galariotis, Emilios, 2019. "The financial performance of firms participating in the EU emissions trading scheme," Energy Policy, Elsevier, vol. 129(C), pages 250-259.
    7. Choi, Yongrok & Zhang, Ning & Zhou, P., 2012. "Efficiency and abatement costs of energy-related CO2 emissions in China: A slacks-based efficiency measure," Applied Energy, Elsevier, vol. 98(C), pages 198-208.
    8. Yongrok Choi & Chao Qi, 2019. "Is South Korea’s Emission Trading Scheme Effective? An Analysis Based on the Marginal Abatement Cost of Coal-Fueled Power Plants," Sustainability, MDPI, vol. 11(9), pages 1-12, April.
    9. Alam, Md. Mahmudul & Murad, Md. Wahid, 2020. "The impacts of economic growth, trade openness and technological progress on renewable energy use in organization for economic co-operation and development countries," Renewable Energy, Elsevier, vol. 145(C), pages 382-390.
    10. Jebali, Eya & Essid, Hédi & Khraief, Naceur, 2017. "The analysis of energy efficiency of the Mediterranean countries: A two-stage double bootstrap DEA approach," Energy, Elsevier, vol. 134(C), pages 991-1000.
    11. Zhang, Zibin & Ye, Jianliang, 2015. "Decomposition of environmental total factor productivity growth using hyperbolic distance functions: A panel data analysis for China," Energy Economics, Elsevier, vol. 47(C), pages 87-97.
    12. Gao, Yuning & Li, Meng & Xue, Jinjun & Liu, Yu, 2020. "Evaluation of effectiveness of China's carbon emissions trading scheme in carbon mitigation," Energy Economics, Elsevier, vol. 90(C).
    13. Dwight H. Perkins, 2023. "Structural Challenges to Sustained Economic Growth in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(1), pages 22-43, January.
    14. Xunpeng Shi & Tsun Se Cheong & Jian Yu & Xiaoguang Liu, 2021. "Quality of Life and Relative Household Energy Consumption in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(5), pages 127-147, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Jing-Yue & Zhang, Yue-Jun, 2021. "Has carbon emissions trading system promoted non-fossil energy development in China?," Applied Energy, Elsevier, vol. 302(C).
    2. Gao, Da & Li, Ge & Yu, Jiyu, 2022. "Does digitization improve green total factor energy efficiency? Evidence from Chinese 213 cities," Energy, Elsevier, vol. 247(C).
    3. Ai, Hongshan & Zhou, Zhengqing & Li, Ke & Kang, Zhi-Yong, 2021. "Impacts of the desulfurization price subsidy policy on SO2 reduction: Evidence from China's coal-fired power plants," Energy Policy, Elsevier, vol. 157(C).
    4. Hongyang Yu & Jiajun Xu & Hui Hu & Xunpeng Shi & Jinchao Wang & Yanli Liu, 2024. "How does green technology innovation influence industrial structure? Evidence of heterogeneous environmental regulation effects," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(7), pages 17875-17903, July.
    5. Xiangyu Teng & Danting Lu & Yung-ho Chiu, 2019. "Emission Reduction and Energy Performance Improvement with Different Regional Treatment Intensity in China," Energies, MDPI, vol. 12(2), pages 1-18, January.
    6. Kim, Sang Joon & Atukeren, Erdal & Kim, Hohyun, 2023. "Does the market's reaction to greenhouse gas emissions differ between B2B and B2C? Evidence from South Korea," Finance Research Letters, Elsevier, vol. 53(C).
    7. Di Zhou & Xiaoyu Liang & Ye Zhou & Kai Tang, 2020. "Does Emission Trading Boost Carbon Productivity? Evidence from China’s Pilot Emission Trading Scheme," IJERPH, MDPI, vol. 17(15), pages 1-16, July.
    8. Zeng, Juying & Pagàn-Castaño, Esther & Ribeiro-Navarrete, Samuel, 2022. "Merits of Intercity Innovation Cooperation of Environment-friendly Patents for Environmental Regulation Efficiency," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    9. Xiangxiang Sun & Lawrence Loh, 2019. "Sustainability Governance in China: An Analysis of Regional Ecological Efficiency," Sustainability, MDPI, vol. 11(7), pages 1-16, April.
    10. Su, Chi Wei & Wei, Shenkai & Wang, Yan & Tao, Ran, 2024. "How does climate policy uncertainty affect the carbon market?," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    11. Lin, Boqiang & Sai, Rockson, 2022. "Sustainable transitioning in Africa: A historical evaluation of energy productivity changes and determinants," Energy, Elsevier, vol. 250(C).
    12. Zhang, Zhengyong & Dai, Xuan & Ding, Yi, 2023. "Government environmental governance and firms’ green innovation: Evidence from listed firms in heavy pollution industries of China," Finance Research Letters, Elsevier, vol. 55(PA).
    13. Maria Elisabete Neves & Carla Henriques & João Vilas, 2021. "Financial performance assessment of electricity companies: evidence from Portugal," Operational Research, Springer, vol. 21(4), pages 2809-2857, December.
    14. Hu, Yucai & Li, Ranran & Du, Lei & Ren, Shenggang & Chevallier, Julien, 2022. "Could SO2 and CO2 emissions trading schemes achieve co-benefits of emissions reduction?," Energy Policy, Elsevier, vol. 170(C).
    15. Liliana Nicoleta Simionescu & Ștefan Cristian Gherghina & Ziad Sheikha & Hiba Tawil, 2020. "Does Water, Waste, and Energy Consumption Influence Firm Performance? Panel Data Evidence from S&P 500 Information Technology Sector," IJERPH, MDPI, vol. 17(14), pages 1-31, July.
    16. Teng, Xiangyu & Liu, Fan-peng & Chiu, Yung-ho, 2021. "The change in energy and carbon emissions efficiency after afforestation in China by applying a modified dynamic SBM model," Energy, Elsevier, vol. 216(C).
    17. Decai Tang & Zhangming Shan & Junxia He & Ziqian Zhao, 2022. "How Do Environmental Regulations and Outward Foreign Direct Investment Impact the Green Total Factor Productivity in China? A Mediating Effect Test Based on Provincial Panel Data," IJERPH, MDPI, vol. 19(23), pages 1-32, November.
    18. Chen, Xing & Lin, Boqiang, 2021. "Towards carbon neutrality by implementing carbon emissions trading scheme: Policy evaluation in China," Energy Policy, Elsevier, vol. 157(C).
    19. Da Gao & Xinlin Mo & Kun Duan & Yi Li, 2022. "Can Green Credit Policy Promote Firms’ Green Innovation? Evidence from China," Sustainability, MDPI, vol. 14(7), pages 1-15, March.
    20. Demiralay, Sercan & Gencer, Hatice Gaye & Bayraci, Selcuk, 2022. "Carbon credit futures as an emerging asset: Hedging, diversification and downside risks," Energy Economics, Elsevier, vol. 113(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:chinae:v:31:y:2023:i:3:p:92-114. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iwepacn.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.