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The Effect of Energy Rights Trading Pilot Policies on Urban Carbon Emissions: Empirical Analysis Based on PSM-DID

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  • Baosheng Zhang

    (Research Center of the Economic and Social Development of Henan East Provincial Joint, Shangqiu Normal University, Shangqiu 476000, China)

  • Kai Wan

    (School of Economics, Hangzhou Dianzi University, Hangzhou 310018, China)

Abstract

The Energy Rights Trading Pilot Policy represents an incentive-based environmental policy, implemented under the auspices of the “dual control” targets, with the objective of promoting energy conservation and emission reduction. However, given the lack of consensus among researchers regarding the relationship between environmental regulation and carbon emissions, this provides new space for further investigation and analysis. This study aims to contribute to this ongoing discourse by examining the mechanisms through which China’s Energy Rights Trading Pilot Policy affects carbon emissions. This paper employs a sample of 285 Chinese cities from 2010 to 2020 and utilizes the difference-in-differences method to evaluate the impact and mechanisms. The findings demonstrate that the energy rights trading pilot system has a considerable impact on reducing urban carbon emissions. Further analysis indicates that the pilot system curbs the increase in urban carbon emissions through the promotion of green technology innovation and industrial structural upgrades. The results of the heterogeneity analysis indicate that the pilot system is more effective in reducing carbon emissions in non-resource-based cities, smaller cities, and in those where chief officials are in a period of critical promotion. This paper makes a marginal contribution to the research on the impact mechanism of market-based environmental regulation policies on urban carbon emissions by taking China’s regulation policies as an example. It also provides empirical support for the goal realization of the incentive-oriented environmental regulation approach in developed countries, as represented by TWC.

Suggested Citation

  • Baosheng Zhang & Kai Wan, 2024. "The Effect of Energy Rights Trading Pilot Policies on Urban Carbon Emissions: Empirical Analysis Based on PSM-DID," Sustainability, MDPI, vol. 16(19), pages 1-17, September.
  • Handle: RePEc:gam:jsusta:v:16:y:2024:i:19:p:8357-:d:1485992
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