IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v237y2024ipbs0960148124017816.html
   My bibliography  Save this article

Does emission trading system (ETS) deserve further promotion in the building sector? Evidence from China

Author

Listed:
  • Song, Xiangnan
  • Pan, Chuwen
  • Yuan, Hongping
  • Wang, Zeyu

Abstract

Although the emission trading system (ETS) has been widely applied and recognized in energy-production side, its impact on the energy-demand side is still ambiguous. Does ETS deserve promotion in energy-demand sectors? If so, what preparations are necessary? In response to these pressing but highly publicized issues, this paper, for the first time, focuses on the building sector which is the most typical energy-demand sector based on energy consumption data from public buildings across 26 regions in China spanning 12 years by employing the Synthetic Control Method (SCM). China, as the most representative developing country with more than ten years of ETS pilot practice for buildings, is a good evidence base. The results indicate that ETS has overall applicability to the building sector despite regional variations. And the government support, industrial structure and economic development orientation are the most determinant of its effect, rather than the conventionally perceived heterogeneous sectoral characteristics of buildings. Moreover, for buildings in the stage of rigid growth, the ETS should be adopted first and foremost to reduce its carbon intensity rather than the total amount. The findings provide practical recommendations on whether and how to promote ETS in future buildings, particularly in developing countries.

Suggested Citation

  • Song, Xiangnan & Pan, Chuwen & Yuan, Hongping & Wang, Zeyu, 2024. "Does emission trading system (ETS) deserve further promotion in the building sector? Evidence from China," Renewable Energy, Elsevier, vol. 237(PB).
    • Handle: RePEc:eee:renene:v:237:y:2024:i:pb:s0960148124017816
    DOI: 10.1016/j.renene.2024.121713
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148124017816
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2024.121713?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Qingxian An & Kefan Zhu & Beibei Xiong & Zhiyang Shen, 2023. "Carbon resource reallocation with emission quota in carbon emission trading system," Post-Print hal-03974850, HAL.
    2. Erik Haites, 2018. "Carbon taxes and greenhouse gas emissions trading systems: what have we learned?," Climate Policy, Taylor & Francis Journals, vol. 18(8), pages 955-966, September.
    3. Toshi H. Arimura & Tatsuya Abe, 2021. "The impact of the Tokyo emissions trading scheme on office buildings: what factor contributed to the emission reduction?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(3), pages 517-533, July.
    4. Niklas Döbbeling-Hildebrandt & Klaas Miersch & Tarun M. Khanna & Marion Bachelet & Stephan B. Bruns & Max Callaghan & Ottmar Edenhofer & Christian Flachsland & Piers M. Forster & Matthias Kalkuhl & Ni, 2024. "Systematic review and meta-analysis of ex-post evaluations on the effectiveness of carbon pricing," Nature Communications, Nature, vol. 15(1), pages 1-12, December.
    5. Abe, Tatsuya & Arimura, Toshi H., 2022. "Causal effects of the Tokyo emissions trading scheme on energy consumption and economic performance," Energy Policy, Elsevier, vol. 168(C).
    6. Li, Zhiguo & Wang, Jie, 2022. "Spatial spillover effect of carbon emission trading on carbon emission reduction: Empirical data from pilot regions in China," Energy, Elsevier, vol. 251(C).
    7. Dechezleprêtre, Antoine & Nachtigall, Daniel & Venmans, Frank, 2023. "The joint impact of the European Union emissions trading system on carbon emissions and economic performance," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    8. Masayo Wakabayashi & Osamu Kimura, 2018. "The impact of the Tokyo Metropolitan Emissions Trading Scheme on reducing greenhouse gas emissions: findings from a facility-based study," Climate Policy, Taylor & Francis Journals, vol. 18(8), pages 1028-1043, September.
    9. Xiongfeng Pan & Mengna Li & Haitao Xu & Shucen Guo & Ranran Guo & Chew Tin Lee, 2021. "Simulation on the effectiveness of carbon emission trading policy: A system dynamics approach," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 72(7), pages 1447-1460, July.
    10. Huo, Tengfei & Cong, Xiaobo & Cheng, Cong & Cai, Weiguang & Zuo, Jian, 2023. "What is the driving mechanism for the carbon emissions in the building sector? An integrated DEMATEL-ISM model," Energy, Elsevier, vol. 274(C).
    11. Easwaran Narassimhan & Kelly S. Gallagher & Stefan Koester & Julio Rivera Alejo, 2018. "Carbon pricing in practice: a review of existing emissions trading systems," Climate Policy, Taylor & Francis Journals, vol. 18(8), pages 967-991, September.
    12. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    13. 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).
    14. Jiang, Jingjing & Ye, Bin & Liu, Junguo, 2019. "Peak of CO2 emissions in various sectors and provinces of China: Recent progress and avenues for further research," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 813-833.
    15. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    16. Zhang, Wei & Li, Jing & Li, Guoxiang & Guo, Shucen, 2020. "Emission reduction effect and carbon market efficiency of carbon emissions trading policy in China," Energy, Elsevier, vol. 196(C).
    17. Chen, Zhongfei & Zhang, Xiao & Chen, Fanglin, 2021. "Do carbon emission trading schemes stimulate green innovation in enterprises? Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    18. Tatsuya Abe & Toshi H. Arimura, 2021. "An Empirical Study of the Tokyo EmissionsEmissions Trading SchemeTrading Scheme: An Ex Post Analysis of Emissions from UniversityUniversity Buildings," Economics, Law, and Institutions in Asia Pacific, in: Toshi H. Arimura & Shigeru Matsumoto (ed.), Carbon Pricing in Japan, chapter 0, pages 97-116, Springer.
    19. Song, Xiangnan & Lu, Yujie & Shen, Liyin & Shi, Xunpeng, 2018. "Will China's building sector participate in emission trading system? Insights from modelling an owner's optimal carbon reduction strategies," Energy Policy, Elsevier, vol. 118(C), pages 232-244.
    20. Huo, Tengfei & Xu, Linbo & Liu, Bingsheng & Cai, Weiguang & Feng, Wei, 2022. "China’s commercial building carbon emissions toward 2060: An integrated dynamic emission assessment model," Applied Energy, Elsevier, vol. 325(C).
    21. Alberto Abadie, 2021. "Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 391-425, June.
    22. Wu, Liangpeng & Zhu, Qingyuan, 2023. "Has the Emissions Trading Scheme (ETS) promoted the end-of-pipe emissions reduction? Evidence from China's residents," Energy, Elsevier, vol. 277(C).
    23. Sadayuki, Taisuke & Arimura, Toshi H., 2021. "Do regional emission trading schemes lead to carbon leakage within firms? Evidence from Japan," Energy Economics, Elsevier, vol. 104(C).
    24. Wu, Rongxin & Tan, Zhizhou & Lin, Boqiang, 2023. "Does carbon emission trading scheme really improve the CO2 emission efficiency? Evidence from China's iron and steel industry," Energy, Elsevier, vol. 277(C).
    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. Dong, Zhaoyingzi & Xiao, Yue, 2024. "Carbon emissions trading policy and climate injustice: A study on economic distributional impacts," Energy, Elsevier, vol. 296(C).
    2. Abe, Tatsuya & Arimura, Toshi H., 2022. "Causal effects of the Tokyo emissions trading scheme on energy consumption and economic performance," Energy Policy, Elsevier, vol. 168(C).
    3. Yan Xiao & Yan Zhang & Jiekuan Zhang, 2023. "The Impact of Carbon Emission Trading on Industrial Green Total Factor Productivity," Sustainability, MDPI, vol. 15(7), pages 1-18, April.
    4. Pier Basaglia & Sophie M. Behr & Moritz A. Drupp, 2023. "De-Fueling Externalities: How Tax Salience and Fuel Substitution Mediate Climate and Health Benefits," Discussion Papers of DIW Berlin 2041, DIW Berlin, German Institute for Economic Research.
    5. Lessmann, Christian & Kramer, Niklas, 2024. "The effect of cap-and-trade on sectoral emissions: Evidence from California," Energy Policy, Elsevier, vol. 188(C).
    6. Kramer, Niklas & Lessmann, Christian, 2023. "The Effects of Carbon Trading: Evidence from California’s ETS," MPRA Paper 116796, University Library of Munich, Germany.
    7. Pier Basaglia & Sophie M. Behr & Moritz A. Drupp & Piero Basaglia, 2023. "De-Fueling Externalities: Causal Effects of Fuel Taxation and Mediating Mechanisms for Reducing Climate and Pollution Costs," CESifo Working Paper Series 10508, CESifo.
    8. Shi Chen & Fu-Wei Huang & Jyh-Horng Lin, 2022. "Borrowing-Firm Emission Trading, Bank Rate-Setting Behavior, and Carbon-Linked Lending under Capital Regulation," Sustainability, MDPI, vol. 14(11), pages 1-14, May.
    9. Zhou, Anhua & Xin, Ling & Li, Jun, 2022. "Assessing the impact of the carbon market on the improvement of China's energy and carbon emission performance," Energy, Elsevier, vol. 258(C).
    10. Ying Zhang & Yingli Huang, 2023. "Killing Two Birds with One Stone or Missing One of Them? The Synergistic Governance Effect of China’s Carbon Emissions Trading Scheme on Pollution Control and Carbon Emission Reduction," Sustainability, MDPI, vol. 15(13), pages 1-25, June.
    11. Zhang, Jiekuan, 2023. "Emissions trading scheme and energy consumption and output structure: Evidence from China," Renewable Energy, Elsevier, vol. 219(P1).
    12. Roth, Jonathan & Sant’Anna, Pedro H.C. & Bilinski, Alyssa & Poe, John, 2023. "What’s trending in difference-in-differences? A synthesis of the recent econometrics literature," Journal of Econometrics, Elsevier, vol. 235(2), pages 2218-2244.
    13. Zhang, Yue-Jun & Cheng, Hao-Sen, 2021. "The impact mechanism of the ETS on CO2 emissions from the service sector: Evidence from Beijing and Shanghai," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    14. Chen, Zhongfei & Zhang, Xiao & Chen, Fanglin, 2021. "Do carbon emission trading schemes stimulate green innovation in enterprises? Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    15. 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).
    16. Lei Zheng & Akira Omori & Jin Cao & Xuemeng Guo, 2023. "Environmental Regulation and Corporate Environmental Performance: Evidence from Chinese Carbon Emission Trading Pilot," Sustainability, MDPI, vol. 15(11), pages 1-18, May.
    17. Jin, Chenfei & Tsai, Fu-Sheng & Gu, Qiuyang & Wu, Bao, 2022. "Does the porter hypothesis work well in the emission trading schema pilot? Exploring moderating effects of institutional settings," Research in International Business and Finance, Elsevier, vol. 62(C).
    18. Sadayuki, Taisuke & Arimura, Toshi H., 2021. "Do regional emission trading schemes lead to carbon leakage within firms? Evidence from Japan," Energy Economics, Elsevier, vol. 104(C).
    19. Liu, Yunqiang & Liu, Sha & Shao, Xiaoyu & He, Yanqiu, 2022. "Policy spillover effect and action mechanism for environmental rights trading on green innovation: Evidence from China's carbon emissions trading policy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 153(C).
    20. Shobande, Olatunji A. & Ogbeifun, Lawrence & Tiwari, Aviral Kumar, 2024. "Extricating the impacts of emissions trading system and energy transition on carbon intensity," Applied Energy, Elsevier, vol. 357(C).

    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:eee:renene:v:237:y:2024:i:pb:s0960148124017816. 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: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    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.