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The Impact of the Carbon Emission Trading Shadow Price on the Green Total Factor Productivity of the Power Industry in China

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  • Longtian Zhang

    (School of Economics and Management, China University of Petroleum-Beijing, Beijing 102249, China)

  • Zheng Pan

    (School of Economics and Management, China University of Petroleum-Beijing, Beijing 102249, China)

Abstract

To mitigate the problem of global climate change, governments have taken measures to reduce greenhouse gas emissions. Carbon emission trading has gradually attracted attention as a market-oriented option. Power industry panel data from 30 provinces in China were used for an empirical analysis in this study. The super-efficiency Slack-Based Measure (SBM) model was used to calculate the shadow price of carbon trading and the green total factor productivity (GTFP), and the Ordinary Least Squares (OLS) regression model was used to quantitatively analyze the correlation between the shadow price of carbon trading and the GTFP of the power industry. The results showed that the shadow price of carbon trading had a significantly negative impact on the GTFP of the power industry; therefore, it needs to be improved and perfected. Through a further analysis using the heterogeneity test, it was found that there were problems in the current carbon trading price mechanism. In the face of the above problems, we offer suggestions for improvement from the perspectives of the government and companies. This study helps deepen the understanding of carbon trading prices and the GTFP in the power industry, and it provides a reference for formulating more effective carbon trading policies and corporate green management strategies.

Suggested Citation

  • Longtian Zhang & Zheng Pan, 2024. "The Impact of the Carbon Emission Trading Shadow Price on the Green Total Factor Productivity of the Power Industry in China," Sustainability, MDPI, vol. 16(10), pages 1-21, May.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:10:p:4020-:d:1392317
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    References listed on IDEAS

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    1. Seifert, Jan & Uhrig-Homburg, Marliese & Wagner, Michael, 2008. "Dynamic behavior of CO2 spot prices," Journal of Environmental Economics and Management, Elsevier, vol. 56(2), pages 180-194, September.
    2. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    3. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    4. Yingkai Yin & Zhihui Jiang & Yazhou Liu & Zheng Yu, 2019. "Factors Affecting Carbon Emission Trading Price: Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(15), pages 3433-3451, December.
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