IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i19p8681-d1494328.html
   My bibliography  Save this article

The Synergistic Effect of the Carbon Emission Trading Scheme on Pollution and Carbon Reduction in China’s Power Industry

Author

Listed:
  • Xiling Zhang

    (College of Architecture and Environment, Sichuan University, Chengdu 610065, China
    College of Carbon Neutrality Future Technology, Sichuan University, Chengdu 610065, China)

  • Xiaoqian Liu

    (College of Carbon Neutrality Future Technology, Sichuan University, Chengdu 610065, China)

  • Zeyu Zhang

    (College of Architecture and Environment, Sichuan University, Chengdu 610065, China
    College of Carbon Neutrality Future Technology, Sichuan University, Chengdu 610065, China)

  • Ruiyi Tang

    (College of Architecture and Environment, Sichuan University, Chengdu 610065, China
    College of Carbon Neutrality Future Technology, Sichuan University, Chengdu 610065, China)

  • Ting Zhang

    (College of Architecture and Environment, Sichuan University, Chengdu 610065, China
    College of Carbon Neutrality Future Technology, Sichuan University, Chengdu 610065, China)

  • Jian Yao

    (College of Architecture and Environment, Sichuan University, Chengdu 610065, China
    College of Carbon Neutrality Future Technology, Sichuan University, Chengdu 610065, China)

Abstract

The synergistic effect of pollution and carbon reduction can alleviate the dual pressure of improving environmental quality and reducing greenhouse gas emissions in China. The carbon emission trading scheme (CETS) is a crucial market-based tool for carbon emission reduction, and understanding its synergistic impact on air pollution control is essential. Based on data from 30 provincial panels in China spanning from 2007 to 2021, we employ the difference-in-differences (DID) method to analyze the synergistic effects of the carbon emission trading plan in the power industry and its influence mechanisms are examined. We observe that the CETS significantly enhances both pollution and carbon reduction in China’s power sector, particularly demonstrating effective synergy in reducing CO 2 , SO 2 , and PM 2.5 emissions. Furthermore, mechanism analysis reveals that the CETS achieves joint emission reductions by lowering energy consumption, influencing the power industry’s generation structure, promoting technological innovation among enterprises, and thereby realizing synergistic pollution and carbon reduction effects in China’s power sector. Heterogeneity analysis shows that regions with limited power facility, low electricity generation, and small economic scale exhibit the most pronounced synergistic benefits from pollution and carbon reduction efforts.

Suggested Citation

  • Xiling Zhang & Xiaoqian Liu & Zeyu Zhang & Ruiyi Tang & Ting Zhang & Jian Yao, 2024. "The Synergistic Effect of the Carbon Emission Trading Scheme on Pollution and Carbon Reduction in China’s Power Industry," Sustainability, MDPI, vol. 16(19), pages 1-17, October.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:19:p:8681-:d:1494328
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/19/8681/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/19/8681/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brian C. Murray & Peter T. Maniloff & Evan M. Murray, 2015. "Why Have Greenhouse Emissions in RGGI States Declined? An Econometric Attribution to Economic, Energy Market and Policy Factors (Payne Institute Policy Brief)," Payne Institute Policy Briefs 2014-04, Colorado School of Mines, Division of Economics and Business.
    2. Pahle, Michael & Fan, Lin & Schill, Wolf-Peter, 2011. "How Emission Certificate Allocations Distort Fossil Investments: The German Example," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 39(4), pages 1975-1987.
    3. Jiang, Minxing & Zhu, Bangzhu & Chevallier, Julien & Xie, Rui, 2018. "Allocating provincial CO2 quotas for the Chinese national carbon program," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(3), July.
    4. Lei, Xu & Xin-gang, Zhao, 2023. "The synergistic effect between Renewable Portfolio Standards and carbon emission trading system: A perspective of China," Renewable Energy, Elsevier, vol. 211(C), pages 1010-1023.
    5. Matthias Damert & Rupert J. Baumgartner, 2018. "Intra‐Sectoral Differences in Climate Change Strategies: Evidence from the Global Automotive Industry," Business Strategy and the Environment, Wiley Blackwell, vol. 27(3), pages 265-281, March.
    6. Li Chen & Di Wang & Ruyi Shi, 2022. "Can China’s Carbon Emissions Trading System Achieve the Synergistic Effect of Carbon Reduction and Pollution Control?," IJERPH, MDPI, vol. 19(15), pages 1-21, July.
    7. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    8. Qu, Kaiping & Yu, Tao & Huang, Linni & Yang, Bo & Zhang, Xiaoshun, 2018. "Decentralized optimal multi-energy flow of large-scale integrated energy systems in a carbon trading market," Energy, Elsevier, vol. 149(C), pages 779-791.
    9. Jie, Dingfei & Xu, Xiangyang & Guo, Fei, 2021. "The future of coal supply in China based on non-fossil energy development and carbon price strategies," Energy, Elsevier, vol. 220(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. Gregor Zoettl, 2021. "Emission trading systems and the optimal technology mix," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(2), pages 281-327, June.
    2. Sanjay Patnaik, 2020. "Emissions permit allocation and strategic firm behavior: Evidence from the oil sector in the European Union emissions trading scheme," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 976-995, March.
    3. Christoph Weber & Philip Vogel, 2014. "Contingent certificate allocation rules and incentives for power plant investment and disinvestment," Journal of Regulatory Economics, Springer, vol. 46(3), pages 292-317, December.
    4. Wang, Yizhong & Hang, Ye & Wang, Qunwei, 2022. "Joint or separate? An economic-environmental comparison of energy-consuming and carbon emissions permits trading in China," Energy Economics, Elsevier, vol. 109(C).
    5. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    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. Frans P. Vries & Nick Hanley, 2016. "Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 687-702, April.
    8. Usher, Dan, 2001. "Personal goods, efficiency and the law," European Journal of Political Economy, Elsevier, vol. 17(4), pages 673-703, November.
    9. Wang, Yongli & Wang, Yudong & Huang, Yujing & Yang, Jiale & Ma, Yuze & Yu, Haiyang & Zeng, Ming & Zhang, Fuwei & Zhang, Yanfu, 2019. "Operation optimization of regional integrated energy system based on the modeling of electricity-thermal-natural gas network," Applied Energy, Elsevier, vol. 251(C), pages 1-1.
    10. George Tridimas & Stanley L. Winer, 2018. "On the Definition and Nature of Fiscal Coercion," Carleton Economic Papers 18-09, Carleton University, Department of Economics.
    11. Mario Jametti & Thomas von Ungern-Sternberg, 2005. "Assessing the Efficiency of an Insurance Provider—A Measurement Error Approach," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 30(1), pages 15-34, June.
    12. Stephanie Rosenkranz & Patrick W. Schmitz, 2007. "Can Coasean Bargaining Justify Pigouvian Taxation?," Economica, London School of Economics and Political Science, vol. 74(296), pages 573-585, November.
    13. Stefan Ambec & Yann Kervinio, 2016. "Cooperative decision-making for the provision of a locally undesirable facility," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(1), pages 119-155, January.
    14. Liu, Duan & Yu, Nizhou & Wan, Hong, 2022. "Does water rights trading affect corporate investment? The role of resource allocation and risk mitigation channels," Economic Modelling, Elsevier, vol. 117(C).
    15. Valcu-Lisman, Adriana & Weninger, Quinn, 2012. "Markov-Perfect rent dissipation in rights-based fisheries," ISU General Staff Papers 201209260700001037, Iowa State University, Department of Economics.
    16. Hausknost, Daniel & Grima, Nelson & Singh, Simron Jit, 2017. "The political dimensions of Payments for Ecosystem Services (PES): Cascade or stairway?," Ecological Economics, Elsevier, vol. 131(C), pages 109-118.
    17. Kurtis Swope & Ryan Wielgus & Pamela Schmitt & John Cadigan, 2011. "Contracts, Behavior, and the Land-assembly Problem: An Experimental Study," Research in Experimental Economics, in: Experiments on Energy, the Environment, and Sustainability, pages 151-180, Emerald Group Publishing Limited.
    18. Ralph E. Townsend, 2010. "Transactions costs as an obstacle to fisheries self-governance in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(3), pages 301-320, July.
    19. Simon Levin & Anastasios Xepapadeas, 2021. "On the Coevolution of Economic and Ecological Systems," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 355-377, October.
    20. Whitten, Stuart M. & Salzman, James & Shelton, Dave & Procter, Wendy, 2003. "Markets for ecosystem services: Applying the concepts," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 58269, Australian Agricultural and Resource Economics Society.

    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:16:y:2024:i:19:p:8681-:d:1494328. 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.