IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i6p3302-d769653.html
   My bibliography  Save this article

Can China’s Policy of Carbon Emissions Trading Optimize Manufacturing Structure? Evidence from Guangdong Based on a Synthetic Control Approach

Author

Listed:
  • Yutao Lei

    (School of Economics and Finance, South China University of Technology, Guangzhou 510006, China)

  • Xuan Zhang

    (School of Economics and Finance, South China University of Technology, Guangzhou 510006, China)

  • Wenxiang Peng

    (School of Economics and Finance, South China University of Technology, Guangzhou 510006, China)

Abstract

On 16 July 2021, the national carbon emissions trading market opened, and the national carbon market officially started online trading. However, it is still unclear whether the carbon emissions trading policy can effectively optimize the manufacturing structure. We studied the experiment of the carbon emissions trading policy that has been ongoing in Guangdong, China, since 2013 to assess the impact of this policy on the manufacturing structure in Guangdong Province compared to other provinces in mainland China that have not implemented a carbon trading pilot policy. The methodology uses a synthetic control method. Using this method, a “synthetic Guangdong” was constructed using data from 23 provinces (municipalities and autonomous regions) in mainland China that did not implement carbon trading policies from 2009 to 2019. The synthetic province had similar observed characteristics to Guangdong before the carbon emissions trading experiment in 2013. Therefore, manufacturing structure differences between Guangdong and the synthetic province after 2013 could be attributed only to the carbon emissions trading policy. The conclusion indicates that in the short term, the carbon emissions trading policy implemented in 2013 can significantly promote manufacturing upgrading and manufacturing greening in Guangdong Province. This policy can optimize the manufacturing structure of Guangdong Province through improving the technological innovation of enterprises and increasing foreign direct investment. Therefore, in regions whose manufacturing structure is similar to Guangdong Province, implementing a carbon emissions trading policy can promote manufacturing upgrading and manufacturing greening.

Suggested Citation

  • Yutao Lei & Xuan Zhang & Wenxiang Peng, 2022. "Can China’s Policy of Carbon Emissions Trading Optimize Manufacturing Structure? Evidence from Guangdong Based on a Synthetic Control Approach," Sustainability, MDPI, vol. 14(6), pages 1-23, March.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:6:p:3302-:d:769653
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/6/3302/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/6/3302/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zhang, Yue-Jun & Peng, Yu-Lu & Ma, Chao-Qun & Shen, Bo, 2017. "Can environmental innovation facilitate carbon emissions reduction? Evidence from China," Energy Policy, Elsevier, vol. 100(C), pages 18-28.
    2. Xiaoqing Chen & Zaiwu Gong, 2017. "DEA Efficiency of Energy Consumption in China’s Manufacturing Sectors with Environmental Regulation Policy Constraints," Sustainability, MDPI, vol. 9(2), pages 1-19, February.
    3. 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.
    4. Shan-Li Wang & Feng-Wen Chen & Bing Liao & Cuiju Zhang, 2020. "Foreign Trade, FDI and the Upgrading of Regional Industrial Structure in China: Based on Spatial Econometric Model," Sustainability, MDPI, vol. 12(3), pages 1-16, January.
    5. Teresa Shuk-Ching Poon, 1998. "Inter-Firm Networks and Industrial Development in the Global Manufacturing System: Lessons from Taiwan," The Economic and Labour Relations Review, , vol. 9(2), pages 262-284, December.
    6. Angela Garcia Calvo, 2014. "Industrial Upgrading in Mixed Market Economies: The Spanish Case," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 3, London School of Economics / European Institute.
    7. Chen Feng & Beibei Shi & Rong Kang, 2017. "Does Environmental Policy Reduce Enterprise Innovation?—Evidence from China," Sustainability, MDPI, vol. 9(6), pages 1-24, May.
    8. Du, Kerui & Cheng, Yuanyuan & Yao, Xin, 2021. "Environmental regulation, green technology innovation, and industrial structure upgrading: The road to the green transformation of Chinese cities," Energy Economics, Elsevier, vol. 98(C).
    9. Rahel Mandaroux & Chuanwen Dong & Guodong Li, 2021. "A European Emissions Trading System Powered by Distributed Ledger Technology: An Evaluation Framework," Sustainability, MDPI, vol. 13(4), pages 1-21, February.
    10. Chuan Shao & Jia Wei & Chuanzhe Liu, 2021. "Empirical Analysis of the Influence of Green Credit on the Industrial Structure: A Case Study of China," Sustainability, MDPI, vol. 13(11), pages 1-15, May.
    11. Hannu Suopajärvi & Timo Fabritius, 2013. "Towards More Sustainable Ironmaking—An Analysis of Energy Wood Availability in Finland and the Economics of Charcoal Production," Sustainability, MDPI, vol. 5(3), pages 1-20, March.
    12. Cheong, Tsun Se & Wu, Yanrui, 2014. "The impacts of structural transformation and industrial upgrading on regional inequality in China," China Economic Review, Elsevier, vol. 31(C), pages 339-350.
    13. Angela Garcia Calvo, 2014. "Industrial Upgrading in Mixed Market Economies: The Spanish Case," LEQS – LSE 'Europe in Question' Discussion Paper Series 73, European Institute, LSE.
    14. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    15. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    16. Wenwen Li & Wenping Wang & Yu Wang & Yingbo Qin, 2017. "Industrial structure, technological progress and CO2 emissions in China: Analysis based on the STIRPAT framework," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 88(3), pages 1545-1564, September.
    17. Zhao, Xin & Shang, Yuping & Song, Malin, 2020. "Industrial structure distortion and urban ecological efficiency from the perspective of green entrepreneurial ecosystems," Socio-Economic Planning Sciences, Elsevier, vol. 72(C).
    18. Sven Maertens & Wolfgang Grimme & Janina Scheelhaase & Martin Jung, 2019. "Options to Continue the EU ETS for Aviation in a CORSIA-World," Sustainability, MDPI, vol. 11(20), pages 1-19, October.
    19. Long, Ruyin & Shao, Tianxiang & Chen, Hong, 2016. "Spatial econometric analysis of China’s province-level industrial carbon productivity and its influencing factors," Applied Energy, Elsevier, vol. 166(C), pages 210-219.
    20. Wang, Xinyue & Wang, Qing, 2021. "Research on the impact of green finance on the upgrading of China's regional industrial structure from the perspective of sustainable development," Resources Policy, Elsevier, vol. 74(C).
    21. Gefu Liang & Dajia Yu & Lifei Ke, 2021. "An Empirical Study on Dynamic Evolution of Industrial Structure and Green Economic Growth—Based on Data from China’s Underdeveloped Areas," Sustainability, MDPI, vol. 13(15), pages 1-16, July.
    22. Wu, Linfei & Sun, Liwen & Qi, Peixiao & Ren, Xiangwei & Sun, Xiaoting, 2021. "Energy endowment, industrial structure upgrading, and CO2 emissions in China: Revisiting resource curse in the context of carbon emissions," Resources Policy, Elsevier, vol. 74(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. Shangui Peng & Jian Wang & Hao Sun & Zhengning Guo, 2022. "How Does the Spatial Misallocation of Land Resources Affect Urban Industrial Transformation and Upgrading? Evidence from China," Land, MDPI, vol. 11(10), pages 1-22, September.
    2. Xiaoqi Li & Dingfei Guo & Chao Feng, 2022. "The Carbon Emissions Trading Policy of China: Does It Really Promote the Enterprises’ Green Technology Innovations?," IJERPH, MDPI, vol. 19(21), pages 1-15, November.
    3. Zeng, Shihong & Li, Tengfei & Wu, Shaomin & Gao, Weijun & Li, Gen, 2024. "Does green technology progress have a significant impact on carbon dioxide emissions?," Energy Economics, Elsevier, vol. 133(C).
    4. Chen, Jiandong & Huang, Shasha & Shen, Zhiyang & Song, Malin & Zhu, Zunhong, 2022. "Impact of sulfur dioxide emissions trading pilot scheme on pollution emissions intensity: A study based on the synthetic control method," Energy Policy, Elsevier, vol. 161(C).
    5. Chunji Zheng & Feng Deng & Chengyou Li, 2022. "Energy-Saving Effect of Regional Development Strategy in Western China," Sustainability, MDPI, vol. 14(9), pages 1-22, May.
    6. Qiuyue Xia & Lu Li & Jie Dong & Bin Zhang, 2021. "Reduction Effect and Mechanism Analysis of Carbon Trading Policy on Carbon Emissions from Land Use," Sustainability, MDPI, vol. 13(17), pages 1-22, August.
    7. Maximiliano Marzetti & Rok Spruk, 2023. "Long-Term Economic Effects of Populist Legal Reforms: Evidence from Argentina," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(1), pages 60-95, March.
    8. Kai Barron & Luis F. Gamboa & Paul Rodríguez-Lesmes, 2019. "Behavioural Response to a Sudden Health Risk: Dengue and Educational Outcomes in Colombia," Journal of Development Studies, Taylor & Francis Journals, vol. 55(4), pages 620-644, April.
    9. Jonathan Colmer & Ralf Martin & Mirabelle Muûls & Ulrich J. Wagner, 2020. "Does pricing carbon mitigate climate change? Firm-level evidence from the European Union emissions trading scheme," CEP Discussion Papers dp1728, Centre for Economic Performance, LSE.
    10. Eleftherios Giovanis & Oznur Ozdamar, 2021. "Regional employment support programs and multidimensional poverty of youth in Turkey," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(4), pages 583-609, December.
    11. Sun, Chuanwang & Tie, Ying & Yu, Lili, 2024. "How to achieve both environmental protection and firm performance improvement: Based on China's carbon emissions trading (CET) policy," Energy Economics, Elsevier, vol. 130(C).
    12. Kodjo Adandohoin & Vigninou Gammadigbe, 2022. "The revenue efficiency consequences of the announcement of a tax transition reform: The case of WAEMU countries," African Development Review, African Development Bank, vol. 34(S1), pages 195-218, July.
    13. Aydemir, Abdurrahman B. & Kırdar, Murat G., 2017. "Quasi-experimental impact estimates of immigrant labor supply shocks: The role of treatment and comparison group matching and relative skill composition," European Economic Review, Elsevier, vol. 98(C), pages 282-315.
    14. Timothy Besley & Torsten Persson, 2011. "Pillars of Prosperity: The Political Economics of Development Clusters," Economics Books, Princeton University Press, edition 1, number 9624.
    15. Yue Dai & Nan Li & Rongrong Gu & Xiaodong Zhu, 2018. "Can China’s Carbon Emissions Trading Rights Mechanism Transform its Manufacturing Industry? Based on the Perspective of Enterprise Behavior," Sustainability, MDPI, vol. 10(7), pages 1-16, July.
    16. Kangjuan Lv & Yu Cheng & Yousen Wang, 2021. "Does regional innovation system efficiency facilitate energy-related carbon dioxide intensity reduction in China?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 789-813, January.
    17. Rui Ding & Fangcheng Sun, 2023. "Impact of River Chief System on Green Technology Innovation: Empirical Evidence from the Yangtze River Economic Belt," Sustainability, MDPI, vol. 15(8), pages 1-22, April.
    18. Luo, Erga & Yan, Ru & He, Yaping & Han, Zhen & Feng, Yiyu & Qian, Wenrong & Li, Jinkai, 2024. "Does biogas industrial policy promote the industrial transformation?," Resources Policy, Elsevier, vol. 88(C).
    19. Mergele, Lukas & Weber, Michael, 2020. "Public employment services under decentralization: Evidence from a natural experiment," Journal of Public Economics, Elsevier, vol. 182(C).
    20. Qi, Xiulin & Wu, Zhifang & Xu, Jinqing & Shan, Biaoan, 2023. "Environmental justice and green innovation: A quasi-natural experiment based on the establishment of environmental courts in China," Ecological Economics, Elsevier, vol. 205(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:gam:jsusta:v:14:y:2022:i:6:p:3302-:d:769653. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.