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Impact on Carbon Intensity of Carbon Emission Trading—Evidence from a Pilot Program in 281 Cities in China

Author

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  • Wanlin Yu

    (School of Economics, Shandong University of Technology, Zibo 255000, China)

  • Jinlong Luo

    (School of Economics, Shandong University of Technology, Zibo 255000, China)

Abstract

China’s carbon emissions trading scheme (ETS) is an institutional arrangement that China intends to explore as a means of energy conservation and emission reduction. It is the core of China’s goal of achieving carbon peaking and carbon neutrality. This paper regards the introduction of pilot carbon emission trading policies as a quasi-natural experiment. Propensity Score Matching (PSM), Differences-in-Differences (DID), and spatial Durbin methods were used to evaluate the policy effects of pilot carbon emission trading policies on the carbon intensity of Chinese cities. We empirically tested the impact mechanism using the panel data of 281 cities at the prefecture level and above in China from 2006 to 2019. The results show that (1) the pilot policy of carbon emission trading has significantly reduced the carbon intensity of Chinese cities and shows characteristics of heterogeneity; (2) the dynamic effect test shows that the mitigation effect of the pilot carbon emission trading policy has increased gradually with time; (3) the mediation effect shows that the pilot carbon emission trading policy alleviates urban pollution in the region by improving the level of environmental governance and jointly reduces urban carbon intensity by increasing the level of green technology innovation; (4) the Durbin test suggests that pilot carbon emissions trading policy enforcement can significantly improve the carbon intensity of the area surrounding the city. In summary, the national carbon emissions trading market appears to be a successful experiment that also can contribute to China’s sustainable development. Its promise in achieving the “double carbon” target provides important policy implications.

Suggested Citation

  • Wanlin Yu & Jinlong Luo, 2022. "Impact on Carbon Intensity of Carbon Emission Trading—Evidence from a Pilot Program in 281 Cities in China," IJERPH, MDPI, vol. 19(19), pages 1-19, September.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:19:p:12483-:d:930147
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    5. Feng Liu & Yu Fu & Weiguo Wang, 2023. "Heterogeneous Effects of China’s Carbon Market on Carbon Emissions—Evidence from a Regression Control Method," Sustainability, MDPI, vol. 16(1), pages 1-20, December.

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