IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i23p10279-d1528144.html
   My bibliography  Save this article

The Spatial Spillover Effect and Mechanism of Carbon Emission Trading Policy on Pollution Reduction and Carbon Reduction: Evidence from the Pearl River–West River Economic Belt in China

Author

Listed:
  • Zhigao Liao

    (School of Economics and Management, Guangxi University of Science and Technology, Liuzhou 545006, China
    Guangxi Research Center for High-Quality Industrial Development, Liuzhou 545006, China)

  • Yufeng Bai

    (School of Economics and Management, Guangxi University of Science and Technology, Liuzhou 545006, China)

  • Kerong Jian

    (School of Economics and Management, Guangxi University of Science and Technology, Liuzhou 545006, China
    Guangxi Research Center for High-Quality Industrial Development, Liuzhou 545006, China
    Graduate School of Management, Siam University, Bangkok 10160, Thailand)

  • Wongvanichtawee Chalermkiat

    (Graduate School of Management, Siam University, Bangkok 10160, Thailand)

Abstract

China faces issues such as air pollution and global climate change, and the Carbon Emission Trading Policy (CETP) has attracted considerable attention as a core policy tool for achieving the “dual carbon” goals. Based on panel data from the Pearl River–West River Economic Belt (PRWREB) from 2008 to 2021, we use the Synthetic Control Method (SCM) and Spatial Difference-in-Differences (S-DID) models to explore the pollution reduction and carbon reduction effects of the CETP and its spatial heterogeneity. Our analysis reveals several interesting insights. First, the CETP has promoted a 34.1% overall reduction in pollution and carbon levels in the pilot areas, with sustained effects. Moreover, spatial spillover effects can reduce the pollution and carbon levels in the economic belt by 29.9%. Second, the pollution and carbon reduction effects of the CETP are more significant in regions with better economic development and active carbon trading. It has the best synergistic reduction effects on CO 2 and SO 2 but is less effective in reducing PM 2.5 . Third, the spillover effects of the CETP on technological innovation are greater than the direct effects, with the most noticeable pollution and carbon reduction outcomes. The overall negative effect on industrial structure is that it fails to promote pollution and carbon reduction. The emission reduction mechanisms vary for different targets: CO 2 and PM 2.5 are related to energy efficiency, SO 2 to advancing industrial structure, and smoke and dust to technological innovation. Based on the research conclusions, we propose to improve the coordinated governance system for carbon and pollution, advance pollution and carbon reduction according to local conditions, and implement targeted emission reduction and efficiency enhancement.

Suggested Citation

  • Zhigao Liao & Yufeng Bai & Kerong Jian & Wongvanichtawee Chalermkiat, 2024. "The Spatial Spillover Effect and Mechanism of Carbon Emission Trading Policy on Pollution Reduction and Carbon Reduction: Evidence from the Pearl River–West River Economic Belt in China," Sustainability, MDPI, vol. 16(23), pages 1-25, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10279-:d:1528144
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/23/10279/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/23/10279/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shufan Zhang & Minda Ma & Nan Zhou & Jinyue Yan & Wei Feng & Ran Yan & Kairui You & Jingjing Zhang & Jing Ke, 2024. "Estimation of Global Building Stocks by 2070: Unlocking Renovation Potential," Papers 2406.04074, arXiv.org.
    2. Teng, Xiangyu & Liu, Fan-peng & Chang, Tzu-han & Chiu, Yung-ho, 2023. "Measuring China’s energy efficiency by considering forest carbon sequestration and applying a meta dynamic non-radial directional distance function," Energy, Elsevier, vol. 263(PC).
    3. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2011. "Synth: An R Package for Synthetic Control Methods in Comparative Case Studies," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 42(i13).
    4. Zhang, Weiwei & Xi, Bin, 2024. "The effect of carbon emission trading on enterprises’ sustainable development performance: A quasi-natural experiment based on carbon emission trading pilot in China," Energy Policy, Elsevier, vol. 185(C).
    5. Li, Zhiguo & Wang, Jie, 2022. "Spatial spillover effect of carbon emission trading on carbon emission reduction: Empirical data from pilot regions in China," Energy, Elsevier, vol. 251(C).
    6. Chen, Zhihao & He, Yong & Liao, Nuo, 2024. "Can carbon emission trading policy enhance the synergistic emission reduction of carbon dioxide and air pollutants? A comparative study considering different pollutants," Energy, Elsevier, vol. 305(C).
    7. Yuan, Hong & Ma, Minda & Zhou, Nan & Xie, Hui & Ma, Zhili & Xiang, Xiwang & Ma, Xin, 2024. "Battery electric vehicle charging in China: Energy demand and emissions trends in the 2020s," Applied Energy, Elsevier, vol. 365(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. Daniel Albalate & Germà Bel & Ferran A. Mazaira-Font, 2020. "Ensuring Stability, Accuracy and Meaningfulness in Synthetic Control Methods: The Regularized SHAP-Distance Method," IREA Working Papers 202005, University of Barcelona, Research Institute of Applied Economics, revised Apr 2020.
    2. Bruno Ferman & Cristine Pinto & Vitor Possebom, 2020. "Cherry Picking with Synthetic Controls," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 510-532, March.
    3. Patricio Álvarez-Munoz & Marco Faytong-Haro & Dennis Alfredo Peralta Gamboa & Angelo Marcos Aviles Valenzuela & Fernando Pacheco-Olea, 2024. "Evaluating Policy Efficacy in Higher Education: A Synthetic Control Analysis of Ecuador’s Higher Education Law on Research Productivity," Publications, MDPI, vol. 12(3), pages 1-13, September.
    4. Sadeghi, Ali & Kibler, Ewald, 2022. "Do bankruptcy laws matter for entrepreneurship? A Synthetic Control Method analysis of a bankruptcy reform in Finland," Journal of Business Venturing Insights, Elsevier, vol. 18(C).
    5. Juan Luo & Chong Xu & Boyu Yang & Xiaoyu Chen & Yinyin Wu, 2022. "Quantitative Analysis of China’s Carbon Emissions Trading Policies: Perspectives of Policy Content Validity and Carbon Emissions Reduction Effect," Energies, MDPI, vol. 15(14), pages 1-20, July.
    6. Dennis Shen & Peng Ding & Jasjeet Sekhon & Bin Yu, 2022. "Same Root Different Leaves: Time Series and Cross-Sectional Methods in Panel Data," Papers 2207.14481, arXiv.org, revised Oct 2022.
    7. César Martinelli & Marco Vega, 2019. "The Economic Legacy of General Velasco: Long-Term Consequences of Interventionism," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 42(84), pages 102-133.
    8. Runst, Petrik & Höhle, David, 2022. "The German eco tax and its impact on CO2 emissions," Energy Policy, Elsevier, vol. 160(C).
    9. Pekka Malo & Juha Eskelinen & Xun Zhou & Timo Kuosmanen, 2024. "Computing Synthetic Controls Using Bilevel Optimization," Computational Economics, Springer;Society for Computational Economics, vol. 64(2), pages 1113-1136, August.
    10. Silvia Marchesi & Tania Masi, 2019. "Sovereign risk after sovereign restructuring. Private and official default," Working Papers 423, University of Milano-Bicocca, Department of Economics, revised Nov 2019.
    11. Dillender, Marcus O. & Heinrich, Carolyn J. & Houseman, Susan N., 2016. "Health insurance reform and part-time work: Evidence from Massachusetts," Labour Economics, Elsevier, vol. 43(C), pages 151-158.
    12. 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.
    13. Michał Marcin Kobierecki & Michał Pierzgalski, 2022. "Sports Mega-Events and Economic Growth: A Synthetic Control Approach," Journal of Sports Economics, , vol. 23(5), pages 567-597, June.
    14. Johanna Catherine Maclean & Brendan Saloner, 2018. "Substance Use Treatment Provider Behavior and Healthcare Reform: Evidence from Massachusetts," Health Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 76-101, January.
    15. Dora Almeida & Luísa Carvalho & Paulo Ferreira & Andreia Dionísio & Inzamam Ul Haq, 2024. "Global Dynamics of Environmental Kuznets Curve: A Cross-Correlation Analysis of Income and CO 2 Emissions," Sustainability, MDPI, vol. 16(20), pages 1-35, October.
    16. Diego Zambiasi & Steven Stillman, 2020. "The Pot Rush: Is Legalized Marijuana A Positive Local Amenity?," Economic Inquiry, Western Economic Association International, vol. 58(2), pages 667-679, April.
    17. Gius, Mark, 2020. "Examining the impact of child access prevention laws on youth firearm suicides using the synthetic control method," International Review of Law and Economics, Elsevier, vol. 63(C).
    18. Brodeur, Abel & Cook, Nikolai & Wright, Taylor, 2021. "On the effects of COVID-19 safer-at-home policies on social distancing, car crashes and pollution," Journal of Environmental Economics and Management, Elsevier, vol. 106(C).
    19. Kuosmanen, Timo & Zhou, Xun & Eskelinen, Juha & Malo, Pekka, 2021. "Design Flaw of the Synthetic Control Method," MPRA Paper 106328, University Library of Munich, Germany.
    20. Marc Diederichs & René Glawion & Peter G. Kremsner & Timo Mitze & Gernot Müller & Dominik Papies & Felix Schulz & Klaus Wälde, 2021. "Is large-scale rapid CoV-2 testing a substitute for lockdowns?," Working Papers 2112, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 08 Mar 2021.

    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:23:p:10279-:d:1528144. 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.