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Curse to blessing: The carbon emissions trading system and resource-based cities' carbon mitigation

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  • Wu, Jianxian
  • Nie, Xin
  • Wang, Han

Abstract

Does market-incentivized energy policy encourage low-carbon growth in resource-based cities (RBCs)? How to turn the resource curse and the carbon curse into blessings depends on the answer to this question. Using panel data from 122 Chinese RBCs, we assess the policy effect of the carbon emissions trading system (CETS) through staggered difference-in-differences. The CETS effectively reduces carbon emissions in RBCs, and the policy effect is more pronounced in the short term. Mechanism analysis demonstrates that the CETS optimizes industrial and energy consumption structures, promotes technological progress, and enhances government and public environmental concerns. The heterogeneity analysis reveals that the CETS is more effective at reducing carbon emissions in mature RBCs than in declining RBCs, which stems from the fact that public concern is ineffective in the latter. The nonlinear relationship finds the existence of inverted U- and M-shaped evolutionary characteristics of the low-carbon transition in RBCs. Our findings highlight the carbon market’s vital role in RBCs' low-carbon transformation.

Suggested Citation

  • Wu, Jianxian & Nie, Xin & Wang, Han, 2023. "Curse to blessing: The carbon emissions trading system and resource-based cities' carbon mitigation," Energy Policy, Elsevier, vol. 183(C).
  • Handle: RePEc:eee:enepol:v:183:y:2023:i:c:s0301421523003816
    DOI: 10.1016/j.enpol.2023.113796
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    Keywords

    Carbon emission trading system; Resource-based cities; Resource curse; Carbon curse; Environmental Kuznets curve; Quasi-experiment;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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