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Study on the effect of carbon trading regulation on green innovation and heterogeneity analysis from China

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  • Liu, Ming
  • Shan, Yanfei
  • Li, Yemei

Abstract

China launched seven pilot areas for climate change mitigation before establishing a unified carbon emissions trading system in 2014. To explore the heterogeneous effect of carbon trading regulation on green innovation in China, we constructed evolutionary games with players of governments and enterprises. We then conducted empirical studies with the difference-in-difference model. With the data of listed Chinese A-share companies from 2008 to 2018, we found that implementing carbon trading pilot projects in China significantly increases the green innovation output of enterprises in the pilot regions. Additionally, the sensitivity to carbon trading policies varies across industries and property rights. Regarding the quality of green innovation triggered by the pilot project, firms in the pilot regions prefer high-quality green invention patent innovations over low-quality green utility model patent innovations. In addition, state-owned enterprises tend to apply for high-quality green invention patents, while firms in high-pollution industries prefer to apply for lower-quality green utility model patents. Finally, we put forward policy suggestions. First, China should accelerate the pilot carbon trading regulation and expand its scope. Second, there should be regional and industrial differences in constricting carbon trading regulations. Third, the government should avoid unreasonable regulatory intensity design.

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  • Liu, Ming & Shan, Yanfei & Li, Yemei, 2022. "Study on the effect of carbon trading regulation on green innovation and heterogeneity analysis from China," Energy Policy, Elsevier, vol. 171(C).
    • Handle: RePEc:eee:enepol:v:171:y:2022:i:c:s0301421522005092
    DOI: 10.1016/j.enpol.2022.113290
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    Cited by:

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    2. Hong Chen & Haowen Zhu & Tianchen Sun & Xiangyu Chen & Tao Wang & Wenhong Li, 2023. "Does Environmental Regulation Promote Corporate Green Innovation? Empirical Evidence from Chinese Carbon Capture Companies," Sustainability, MDPI, vol. 15(2), pages 1-24, January.
    3. Zhichao Ma & Jie Zhang & Huanhuan Wang & Shaochan Gao, 2023. "Optimization of Sustainable Bi-Objective Cold-Chain Logistics Route Considering Carbon Emissions and Customers’ Immediate Demands in China," Sustainability, MDPI, vol. 15(7), pages 1-23, March.
    4. Ke Mao & Junxin Huang, 2022. "How Does Climate Policy Uncertainty Affect Green Innovation? Evidence from China," IJERPH, MDPI, vol. 19(23), pages 1-14, November.
    5. Wang, Yong & Song, Chunyang & Wang, Wenhao, 2023. "Suppliers’ decision on green innovation: A response to customers’ environmental regulation," Finance Research Letters, Elsevier, vol. 58(PA).
    6. Lyu, Zhengwei & Lan, Hongjie & Hua, Guowei & Cheng, T.C.E. & Xu, Yadong, 2024. "How to promote Chinese food waste-to-energy program? An evolutionary game approach," Energy, Elsevier, vol. 293(C).
    7. Yadu Zhang & Yiteng Zhang & Zuoren Sun, 2023. "The Impact of Carbon Emission Trading Policy on Enterprise ESG Performance: Evidence from China," Sustainability, MDPI, vol. 15(10), pages 1-27, May.
    8. Chen, Ming & Li, Zhongfei & Liu, Zhuang, 2024. "Substantive response or strategic response? The induced green innovation effects of carbon prices," International Review of Financial Analysis, Elsevier, vol. 93(C).

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