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Assessment of the co-benefits of China's carbon trading policy on carbon emissions reduction and air pollution control in multiple sectors

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  • Xian, Botong
  • Wang, Yanan
  • Xu, Yalin
  • Wang, Juan
  • Li, Xiaoyan

Abstract

Achieving synergies in reducing carbon emissions and air pollution is the key to promoting green development in China's economy and society. However, the effectiveness and synergy of carbon reduction policies, such as the carbon trading policy in each sector, have not been assessed. This study uses the time-varying difference-in-difference model (DID) to assess the co-benefits and mechanisms of carbon trading pilot policy on the emissions of carbon and air pollutants across the country and in the power, industry, transport, and resident sectors. The results show that the policy is useful in controlling air pollution in pilot areas, and the effect is better than that of reducing carbon emissions. The carbon trading policy can also help various sectors achieve the co-benefits of reducing carbon emissions and controlling air pollution. Furthermore, the mediating role of industrial structure, technological progress, and foreign direct investment in the implementation of carbon trading policy varies across sectors. The results can provide guidance for each sector to achieve collaborative governance in reducing carbon emissions and air pollution.

Suggested Citation

  • Xian, Botong & Wang, Yanan & Xu, Yalin & Wang, Juan & Li, Xiaoyan, 2024. "Assessment of the co-benefits of China's carbon trading policy on carbon emissions reduction and air pollution control in multiple sectors," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1322-1335.
    • Handle: RePEc:eee:ecanpo:v:81:y:2024:i:c:p:1322-1335
    DOI: 10.1016/j.eap.2024.01.011
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    2. Wang, Xu & Wen, Ziyu & He, Lingyun & Zheng, Haoyang & Yang, Tengfei & Long, Ruyin, 2024. "The role of imperfect market structure in the employment effect of emissions trading scheme in China: A theoretical extension and empirical investigation," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 920-937.

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