Market incentives, carbon quota allocation and carbon emission reduction: Evidence from China's carbon trading pilot policy

Distortion amplification effects caused by imperfect climate policies: Evidence from China's emissions trading scheme

In pursuit of decarbonization, a suite of stringent climate policies has been implemented by China, with the carbon emissions trading scheme (ETS) emerging as a pivotal market-based mechanism for carbon reduction. However, the ETS remains in a phase of development with an underdeveloped price discovery function, potentially exacerbating resource misallocations in the interconnected energy market. This study theoretically proves the impact of imperfect ETS on energy misallocation and employs the panel dataset encompassing 30 Chinese provinces spanning the years 2000-2022, utilizing both the difference-in-differences (DID) method and the double machine learning model (DML) for empirical analysis. Findings reveal that the imperfect ETS exacerbates energy misallocation, and raising carbon prices could further amplify this issue. Notably, our regression analyses suggest that the DID methodology may underestimate the extent of this impact compared with the DML approach. Results are both statistically significant and robust, passing rigorous validity tests. Finally, grounded in theory and empirical insights, we conclude with tailored policy proposals aimed at optimizing the evolution of the carbon market.

Research on the synergistic effects of market-oriented environmental regulations on pollution and carbon emission reduction

The reduction of greenhouse gases and atmospheric pollutants is a crucial aspect of environmental and climate governance. This paper utilizes pollution rights trading and carbon emissions trading policies as quasi-natural experiments to examine their effects. A difference-in-differences-in-differences (DDD) empirical model is used to analyze the data at the prefecture-level city level. The effectiveness of market-oriented environmental regulations in promoting synergistic reductions of pollutants and carbon emissions is assessed. The findings reveal that (1) carbon emissions trading and pollution rights trading policies significantly reduce emissions of carbon dioxide, sulfur dioxide, and particulate matter. The analysis confirms differentiated synergistic emission reduction effects between these two policy types. (2) Heterogeneity analysis reveals that the synergistic emission reduction effect of market-oriented environmental regulations is more pronounced in regions with environmental courts, in the eastern regions, and in the non-resource-endowed areas. (3) Mechanism analysis further reveals that the synergistic effect of the pollution rights trading policy is achieved through source control, process control, and end-of-pipe control measures. However, the synergistic effect of the carbon emissions trading policy is achieved through source control and process control. (4) Dynamic analysis indicates that the carbon emissions trading policy has shown significant synergistic effects since its early implementation. Conversely, the synergistic effects of the pollution rights trading policy have progressively enhanced with the application of the "end-of-pipe control" model. This study elucidates the effectiveness of synergistic governance through market-oriented environmental regulations in reducing both pollutant and carbon emissions. The findings provide valuable guidance for other emerging economies to reduce both greenhouse gas and air pollutant emissions.

Can digital governance promote urban energy conservation and emission reduction? A quasi-natural experiment based on "National Pilot Policy of Information Benefiting the People" in China

The digital transformation of government is an important path to achieve the modernization of the national governance system and governance capacity. In recent years, the "National Pilot Policy of Information Benefiting the People" has become a key measure for big data to empower government governance, accelerate the improvement of public service levels and equalization of public services. This paper adopts the difference-in-difference method, takes the "National Pilot Policy of Information Benefiting the People" implemented in my country in 2014 as a quasi-natural experiment of digital governance, and explores the effectiveness of government digital governance measures on urban energy conservation and emission reduction and its potential transmission mechanism based on panel data of 283 cities in China from 2006 to 2021. The study found that the construction of digital government has a positive role in promoting urban energy conservation and emission reduction, and this positive impact is mainly achieved by promoting green technology innovation and strengthening environmental regulation; there are differences in the impact of digital governance on urban energy conservation and emission reduction among cities of different regions, different scales, and different resource endowments. This paper studies the energy conservation and emission reduction effect of government governance from the perspective of digital transformation, and provides important empirical inspiration for the sustainable development of cities under the dual carbon goals and the formulation of energy conservation and emission reduction action strategies.

Assessment of synergistic governance of pollution and carbon reduction

Based on a quasi-natural experiment with the Zero Waste Cities (ZWC) initiative launched in 2019, this study takes 14,191 Chinese A-share listed companies from 2014 to 2022 as the research object to assess the impact of the policy on pollution and carbon emission reduction through a difference-in-difference method. It highlights the superior effectiveness of ZWC in enhancing collaborative efforts towards emissions reduction, with waste reduction impacts exceeding those on carbon emissions. The success is attributed to three main channels: rigorous environmental governance, green innovation promotion by firms, and shifts in public behavior. Unlike local punitive measures, a distinctive subsidy incentive mechanism significantly bolsters policy effectiveness. Heterogeneity analysis shows a more pronounced impact in regions with active green credits, high waste discharge, firms with irreversible resources, and firms lacking green experience. Further, the study reveals that while the ZWC policy encourages sustainable development with strict ecological standards, it inadvertently leads to a "pollution refuge" effect-decreasing the number of businesses in pilot areas but increasing them in neighboring regions, along with a rise in carbon and waste emissions. Additionally, the study underscores an inverted "U" shaped environmental Kuznets curve in Chinese cities. These findings provide valuable insights for implementing waste-free urban strategies in emerging nations.

Comparative analysis of certified emission reduction methodologies for methane emission reduction in China

As one of the top emitters of methane (CH4), China must take action to achieve its carbon neutrality goal. Programs to reduce CH4 emissions would benefit from the establishment of the China Certified Emission Reduction (CCER) trading market. However, studies investigating the impact of the CCER trading market on CH4 reduction remain limited. This study therefore analyzes the emission reduction performance of CH4-related CCER projects and investigates their accounting methodologies. The results show that 182 CH4 emissions reduction projects were registered between 2012 and 2017, covering coal mining, energy, waste treatment and disposal, and agriculture, with an annual emissions reduction of 19.8 MtCO2e. It was observed that, while the pre-restart methodology system covered a wide range of emission reduction areas, its application frequency was unevenly distributed. Most projects were registered in only a few emission reduction domains, with the majority of methodologies remaining unused since their publication. Moreover, the IPCC default values were frequently used in China-specific emission accounting, leading to significant uncertainties. Recommendations are made on how to improve the effectiveness of CH4 emissions reduction measures based on this analysis.

A burden-sharing model shaping the embodied carbon emission and considering regions' efforts to reduce emissions in China's power sector

To achieve "carbon peaking and carbon neutrality", reasonable burden-sharing for emission reductions among key players is critical. And reasonable burden-sharing requires scientific clarification of their actual emissions and responsibilities, and full accounting of efforts to reduce emissions. Therefore, this paper focuses on China's power industry and proposes a burden-sharing model that reflects regions' embodied carbon emissions and mitigation efforts. Moreover, considering the economic spillover effects of the power industry in different regions to re-define China's sub-regional emission reduction targets. Results show a significant difference in the flow of electricity embodied carbon among China's regions. The carbon embodied in the power industry increased by 948 million tonnes between 2012 and 2017, mainly due to changes in the structure of final demand and production. Furthermore, implementing the Emissions Trading System (ETS) has effectively curbed carbon emissions in seven pilot provinces and cities, namely Beijing, Tianjin, Shanghai, Guangdong, Hubei, Chongqing, and Fujian, especially Beijing. Spillover effects significantly impact the economic growth of provinces, and some provinces that have enjoyed the benefits of spillover effects should take more responsibility for emission reductions. In summary, each region has different allowances and it is suggested that differentiated policies should be implemented to promote regionally-ordered low-carbon development and achieve the dual-carbon goal.

Impact of legal commitments on carbon intensity: A multi-country perspective

High carbon intensity (CI) contributes to climate change, hindering the achievement of the United Nations' Sustainable Development Goal 13 (SDG13). National legal commitments (LC) to reduce carbon emissions can mitigate this obstacle. This study identifies 32 countries with LC to carbon reduction as the treatment group and countries with commitments at other levels (e.g., policy statements) as the control group. Using panel data from 143 countries between 2006 and 2022, the study employs a Difference-in-Differences with multiple time periods (DID-MTP) model to examine the impact of LC on CI. The results indicate that countries with LC achieved a significant 7.3% reduction in CI, a finding that remains consistent across various robustness tests. Furthermore, LC contribute to the reduction of CI by lowering energy intensity, promoting technological innovation, and enhancing the industrial structure upgrading. The impact of LC on CI shows substantial heterogeneity across countries, operating through multiple mechanisms that reflect differentiated pathways of influence. Lastly, LC have also proven effective in reducing the emissions of other pollutants, such as CO2, CH4, and N2O. This research provides empirical support for global climate governance and offers valuable insights for nations in formulating and implementing effective carbon reduction policies.

Manufacturing enterprises move towards sustainable development: ESG performance, market-based environmental regulation, and green technological innovation

The traditional extensive development of the manufacturing industry has caused significant environmental damage. Consequently, the manufacturing sector urgently needs a green transformation to achieve sustainable development. The primary goal of current research is to examine the extent to which green technological innovation (GTI) impacts enterprises' environmental, social, and governance (ESG) performance. Moreover, it determines if this impact varies across enterprises of different natures, resource allocation capabilities, and geographical regions. Furthermore, we will explore how GTI affects the ESG performance of companies through internal and external mechanisms. We empirically examine these issues through panel models using a sample of 3203 Chinese manufacturing firms with 28,334 observations from 2006 to 2022. The findings reveal that (i) GTI significantly enhances firms' ESG performance; (ii) market-based environmental regulation positively influences the relationship between GTI and ESG performance; (iii) GTI contributes to improving a firm's ESG performance by reducing carbon emission intensity; and (iv) the impact of GTI on firms' ESG performance is notably pronounced among non-state-owned enterprises, those with high green total factor productivity, and firms in the central region. Collectively, these findings present a clear pathway for firms to enhance their ESG performance, provide a theoretical foundation for government policy decisions, and contribute to sustainable development.

Does the pilot trading of carbon emission rights cause domestic or international pollution transfer?

The implementation of a carbon emission trading pilot policy has a positive impact on sustainable development but may lead to pollution transfer by enterprises, thereby affecting sustainability. In this study, based on the panel data of Chinese-listed companies from 2007 to 2017, the carbon emission trading pilot policy was treated as a quasi-natural experiment and the Difference-in-Differences model was used to analyze whether these companies engaged in pollution transfer under the policy shock. The results indicated: first, carbon emission trading pilots lead to pollution transfer within mainland China but not across international borders; second, the power and aviation industries exhibited significant pollution transfer phenomena, and the policy also encouraged pollution transfer by non-green transformation enterprises; third, regional heterogeneity further showed that the central region showed no signs of pollution transfer and instead experienced pollution inflow, while the eastern region exhibited significant pollution transfer. Therefore, in designing policy, we should fully consider the phenomenon of enterprise pollution transfer, promote technological innovation, and ensure that carbon emission trading policies achieve emission reduction goals and promote sustainable development.

Optimizing environmental regulation policies for digital transformation in energy enterprises in China: An evolutionary game theory approach

In response to the global consensus on achieving carbon reduction, China has introduced a series of policies aimed at accelerating the digital transformation of energy enterprises. However, these policies have revealed shortcomings such as deficiency in regulation methods and insufficient integration of regulation with technologies. This study applies evolutionary game theory (EGT) to evaluate the impacts of different environmental regulatory policies on the digital transformation and verifies the effectiveness of the theory in policy optimization. Utilizing modified real-world data, the study quantitatively examines the effects of alterations in various parameter combinations on players' strategic choices. The results indicate that: (1) increasing the regulatory intensity above 0.8, the carbon tax rate and penalties can promote the digital transformation, stimulating the low-carbon development in energy sector; (2) an interesting finding is that tax incentives such as carbon tax refund ratio can exacerbate enterprises' reliance on government compensation, thereby slowing down their transition process; (3) this study highlights the optimal service provision intensity for technological service providers (TSP) is 0.9, which can expedite system evolution towards the ideal state and foster the construction of a favorable digital regulatory environment. The study provides valuable references for optimizing regulatory policies and promoting digital transformation to realize the decarbonization goal.

Carbon Abatement and Leakage in China's Regional Carbon Emission Trading

Emission trading schemes (ETS) are increasingly becoming a popular policy instrument to balance carbon abatement and economic growth. As a globally unified carbon pricing system has not yet been established, whether regionally operated ETSs cause carbon leakage remains a major concern. Taking China's regional pilot ETSs as a quasi-natural experiment, the study uses the spatial difference-in-differences method to examine how regional ETSs affect carbon emissions in and outside cities of policy implementation. Our analysis finds that China's regional ETS policy contributes to a 6.1% reduction in urban CO2 emissions and a 6.6% decline in emissions intensity in regulated cities, causing carbon leakages that increase CO2 emissions in neighboring cities by 1.7% on average. Our finding further suggests that regional ETSs mitigate local CO2 emissions through outsourcing production, improving energy efficiency and decarbonizing energy structure, whereas the outsourcing of industrial production drives up CO2 emissions in adjacent cities. Moreover, the performances of regional ETSs vary largely by socioeconomic context and mechanism design. China's regional ETSs reduce CO2 emissions more effectively in central and industrial cities but with more severe carbon leakage, while rigorous compliance mechanisms and active market trading help deepen carbon abatement and alleviate carbon leakage.

Options for environmental regulation policy under China's carbon peaking target: Energy supply policy or carbon tax policy?

China plans to achieve the carbon peaking target by 2030 and will maybe implement a series of environmental regulation policies, primarily including energy supply policy (such as coal consumption constraint and non-fossil energy development) and carbon tax policy. This paper simulates these policies using a computable general equilibrium model. The simulation results indicate that carbon tax policy has a finite impact on the economy, the emissions reduction effect is also limited and carbon tax policy alone is insufficient to achieve China's 2030 carbon peaking target. The coal consumption constraint policy has a good emissions reduction effect, but is not conducive to economic growth. The non-fossil energy development policy can increase energy supply and promote economic growth, but the emissions reduction effect is inadequate. In general, the simultaneous implementation of the coal consumption constraint and non-fossil energy development policies could not only achieve the carbon peaking goal, but also narrow the energy gap and reduce pressure on economic growth. However, it is notable that if carbon tax policy and energy supply policy are implemented simultaneously, the emissions reduction effect of carbon tax policy would be significantly reduced; therefore, it is likely that no carbon tax will be levied in China.

Hydrate Technologies for CO2 Capture and Sequestration: Status and Perspectives

CO2 capture and sequestration based on hydrate technology are considered supplementary approaches for reducing carbon emissions and mitigating the greenhouse effect. Direct CO2 hydrate formation and CH4 gas substitution in natural gas hydrates are two of the main methods used for the sequestration of CO2 in hydrates. In this Review, we introduce the crystal structures of CO2 hydrates and CO2-mixed gas hydrates and summarize the interactions between the CO2 molecules and clathrate hydrate/H2O frames. In particular, we focus on the role of diffraction techniques in analyzing hydrate structures. The kinetic and thermodynamic properties then are introduced from micro/macro perspectives. Furthermore, the replacement of natural gas with CO2/CO2-mixed gas is discussed comprehensively in terms of intermolecular interactions, influencing factors, and displacement efficiency. Based on the analysis of related costs, risks, and policies, the economics of CO2 capture and sequestration based on hydrate technology are explained. Moreover, the difficulties and challenges at this stage and the directions for future research are described. Finally, we investigate the status of recent research related to CO2 capture and sequestration based on hydrate technology, revealing its importance in carbon emission reduction.

Evaluating coupling coordination between urban smart performance and low-carbon level in China's pilot cities with mixed methods

The construction models of smart cities and low-carbon cities are crucial for advancing global urbanization, enhancing urban governance, and addressing major urban challenges. Despite significant advancements in smart and low-carbon city research, a consensus on their coupling coordination remains elusive. This study employs mixed-method research, combining qualitative and quantitative analyses, to investigate the coupling coordination between urban smart performance (SCP) and low-carbon level (LCL) across 52 typical smart and low-carbon pilot cities in China. Independent evaluation models for SCP and LCL qualitatively assess the current state of smart and low-carbon city construction. Additionally, an Entropy-TOPSIS-Pearson correlation-Coupling coordination degree (ETPC) analysis model quantitatively examines their relationship. The results reveal that smart city initiatives in China significantly outperform low-carbon city development, with notable disparities in SCP and LCL between eastern, non-resource-based, and central cities versus western, resource-dependent, and peripheral cities. A strong positive correlation exists between urban SCP and overall LCL, with significant correlations in management, society, and economy, and moderate to weak correlations in environmental quality and culture. As SCP levels improve, the coupling coordination degree between the urban SCP and LCL systems also increases, driven primarily by economic, management, and societal factors. Conversely, the subsystems of low-carbon culture and environmental quality show poorer integration. Based on these findings, this study proposes an evaluation system for smart and low-carbon coupling coordination development, outlining pathways for future development from the perspective of urban complex systems.

How can green finance effectively promote low-carbon cities? Evidence from 237 cities in China

Urban areas contribute 85% of China's CO2 emissions. Green finance is an important means to support green energy development and achieve the low-carbon transformation of high-energy-consuming industries. The motivation of this article is to investigate the impact and mechanism of green finance on urban carbon intensity. Most existing literature uses linear models to investigate urban carbon intensity, ignoring the nonlinear relationships between economic variables. The nonparametric models can fill the inherent shortcomings of linear models and effectively simulate the nonlinear nexus between economic variables. Based on the 2011-2021 panel data of 237 cities in China, this paper applies the nonparametric additive model to survey the influence of green finance on urban carbon intensity. Empirical findings exhibit that green finance exerts an inverted U-shaped effect on urban carbon intensity, indicating that the carbon reduction effect of green finance has gradually shifted from inconspicuous in the early stages to prominent in the later stages. Then, from the perspectives of region, city size, and carbon intensity, this article conducts heterogeneity analysis. The results show that the impact of green finance on various carbon intensities all exhibits obvious nonlinear feature. Furthermore, this article employs a mediation effect model to conduct mechanism analysis. The results display that technological progress and industrial structure are two important mediating variables, both of which produce an inverted U-shaped nonlinear impact on urban carbon intensity.

Multi objective optimization and evaluation approach of prefabricated component combination solutions using NSGA-II and simulated annealing optimized projection pursuit method

As a main carrier mode for the sustainable development of the construction industry in China, prefabricated building may lead to problems such as cost overruns, project delays, and waste of resources due to unreasonable selection of prefabricated components. Therefore, we quantitatively analyze the contribution rate of quality optimization of prefabricated components using QFD-SEM. Under the constraints of prefabrication rate, quality optimization contribution rate, and expected values of various sub-goals, we propose a multi-objective optimization method for prefabricated component combinations based on cost, duration, and carbon emissions. By using NSGA-II to solve the model, we can obtain a set of optimal Pareto solutions for prefabricated component combinations. Based on the optimal Pareto solution set, we establish a multi-objective evaluation model using simulated annealing optimization projection tracing method, and select the optimal prefabricated component combination solution according to the projected eigenvalues of the solutions. An empirical study is conducted using an eleven-story framed building in Shenzhen, Guangdong Province, China as a case study. The results show that: (1) Using this method, optimal solutions can be obtained in an unbounded solution space, with the optimal solution having advantages over both fully cast-in-place and fully prefabricated solutions. Compared to the fully cast-in-place solution, the duration and carbon emissions are reduced by 36.62% and 12.74% respectively, while compared to the fully prefabricated solution, costs are reduced by 4.15%. (2) There is a certain negative correlation between the cost of prefabricated component combinations and duration, carbon emissions, and quality optimization, while there is a certain positive correlation with the prefabrication rate. (3) The size of the optimal projection direction vector based on the optimization objectives indicates that carbon emissions have the greatest impact on the evaluation results of the solutions.

Research on the spatiotemporal evolution and non-stationarity effect of urban carbon balance: Evidence from representative cities in China

Accelerating the attainment of carbon balance in Chinese cities has become pivotal in addressing global climate change and promoting green, low-carbon development. This study, encompassing 277 prefecture-level and above cities from 2007 to 2020, reveals a positive overall trend in China's urban carbon balance index. The evolution unfolds in two stages, demonstrating a distinct "tiered development" pattern across the eastern, central and western regions. Moreover, significant spatial agglomeration characteristics characterize China's carbon balance hot and cold spots throughout the study period, with their spatial agglomeration degree remaining stable. The standard deviation ellipse analysis confirms these hot and cold spots' alignment with China's economic development level and population distribution. The GTWR test results highlight the pronounced non-stationary characteristics of different driving factors in space and time, exhibiting variations in strength and direction among regions. Consequently, enhancing China's urban carbon balance requires tailored measures based on different areas' unique conditions and development characteristics, emphasizing a hierarchical and classified approach to leverage distinct driving factors and foster a green development system in China.

Dual-circulation: influence mechanism of ETS's carbon reduction and its spatiotemporal characteristics based on intensity modified SDID model

Traditional DID models overlook variations in policy intensity, causing estimation deviations from the actual situation and a limited understanding of the influence mechanism. In response, the Intensity Modified SDID Model is built to examine the influence mechanism of ETS's carbon reductions. Moreover, through model extensions, the study explores the spatiotemporal characteristics and heterogeneities of ETS's effects. Results show that: (1) "Dual-circulation" influence mechanism is confirmed, where ETS directly contributes to carbon reductions (2.70% to 10.0% impact) through external pathways, and internal pathways continuously strengthen reduction effects, comprehensive mechanisms are thereby formed and enhanced based on interaction among internal and external pathways. (2) Reasonable ETS levels are estimated and proposed to achieve "Dual Carbon Target", constraining nationwide carbon quotas by 20 billion tons/year, increasing carbon trading volumes by 80 thousand tons/year, and elevating the carbon trading prices by 100 RMB (14 USD) per ton. (3) ETS's carbon reduction effects are identified with temporal and spatial characteristics, temporally, effects peak in the 4th period (Event+4) but diminish in the 5th period (Event+5), spatially, effects peak in areas distancing around 1000 km but disappear beyond 1500 km. (4) ETS also has synergistic effects with atmospheric pollution reduction, including industrial emissions of sulfur dioxide and smoke (dust), but are insignificant to industrial emissions of wastewater and solid waste.

The power of attention: Government climate-risk attention and agricultural-land carbon emissions

Climate change is a common challenge faced by all humanity. Promoting emission and carbon reduction in agricultural land is the most important priority for addressing climate change and realizing sustainable development. Based on data from 296 prefecture-level cities in China from 2011 to 2021, this study utilizes machine-learning and text-analysis methods to construct an indicator of government climate-risk attention (GCRA). It combines a two-way fixed-effects model to investigate how GCRA affects agricultural-land carbon emissions (ALCE) and carbon intensity (ALCI) and the mechanism of the impact. The results indicate that (1) GCRA substantially reduces ALCE and ALCI, and the conclusions are robust to a battery of tests. Furthermore, (2) mechanism analysis reveals that GCRA primarily uses three mechanisms-strengthening environmental regulation, promoting agricultural green-technology innovation, and upgrading agricultural-land mechanization-to reduce ALCE and lower ALCI. Additionally, (3) heterogeneity analysis suggests that the carbon-emission reduction effect of GCRA is more significant in the east, in arid and humid climate zones, and in non-grain-producing regions. Finally, (4) spatial-spillover effect analysis and quantile regression results demonstrate that GCRA also significantly inhibits carbon emissions and the carbon intensity of nearby agricultural land, with the inhibition effect becoming more pronounced at higher levels of government attention. This study's discoveries are helpful in promoting the emission reduction and carbon sequestration of agricultural land and provide references for developing countries to cope with climate change.

Time-varying impacts of green credit on carbon productivity in China: New evidence from a non-parametric panel data model

In the context of global climate change threatening human survival, and in a post-pandemic era that advocates for a global green and low-carbon economic recovery, conducting an in-depth analysis to assess whether green finance can effectively support low-carbon economic development from a dynamic perspective is crucial. Unlike existing research, which focuses solely on the average effects of green credit (GC) on carbon productivity (CP), we introduce a non-parametric panel data model to investigate GC's impact on CP across 30 provinces in China from 2003 to 2021, verifying a significant time-varying effect. Specifically, during the first phase (2003-2008), GC negatively impacted CP. In the second phase (2009-2014), this negative influence gradually diminished and transformed into a positive effect. In the third phase (2015-2021), GC continued to positively influence CP, although this effect became insignificant during the pandemic. Further subgroup analysis reveals that in the regions with low environmental regulations, GC did not significantly boost CP throughout the sample period. In contrast, in the regions with high environmental regulations, GC's positive effect persisted in the mid to late stages of the sample period. Additionally, compared to the regions with low levels of marketization, the impact of GC on CP was more pronounced in highly marketized regions. This indicates that the promoting effect of GC on CP depends on strong support from environmental regulations and well-functioning market mechanisms. By adopting a non-parametric approach, this study reveals variations in the impact of GC on CP across different stages and under the influence of the pandemic shock, offering new insights into the relationship between GC and China's CP.

Game-theoretic modeling in regulating greenhouse gas emissions

This research introduces an innovative framework for addressing the escalating issue of greenhouse gas emissions through the integration of game theory with differential equations, proposing a novel model to simulate the regulatory dynamics between emission sources and legislative actions. By blending advanced mathematical modeling with environmental science, this paper underscores the critical necessity for pioneering, proactive strategies in environmental management and policy formulation. Central to our approach is the simulation of interactions within a game-theoretic context, aiming to delineate optimal strategies for emission sources and regulatory bodies, factoring in legislative constraints and environmental ramifications. The methodology employs a system of ordinary differential equations, capturing the dynamic, non-stationary nature of atmospheric processes and offering a realistic portrayal of the challenges in mitigating greenhouse gas emissions. Furthermore, the study introduces a fee-based regulatory mechanism designed to encourage emission reductions, highlighting the economic implications of such strategies. Significantly contributing to environmental management, this research presents a detailed model capable of predicting the trajectory of greenhouse gas emissions over a decade, considering the potential impact of technological innovations in emission control. The conclusion emphasizes the promising role of artificial intelligence in refining environmental governance, acknowledging the complexities and limitations inherent in predictive modeling. Aimed at policymakers and environmental scientists, this paper serves as a strategic tool for informed decision-making, advocating for a multidisciplinary approach to develop sustainable, effective solutions to combat one of the most critical environmental challenges facing the globe today.

Impacts of pilot carbon emission trading policies on urban environmental pollution: Evidence from China

The trading of carbon emissions is a crucial regulatory method to address environmental pollution issues. This study takes China's carbon emission trading pilot policy established in 2013 as a quasi-natural experiment and uses the DID model to empirically test the urban panel data from 2006 to 2019. The results show that the carbon emission trading pilot policy can effectively reduce urban environmental pollution, and this effect is more noticeable in mid-western cities, northern cities, cities with fewer resources, and large-scale cities. In addition, to address the urban environmental pollution problem through this policy, the government is encouraged to raise its environmental protection awareness and put more effort into the innovation of technology. In general, this study uses carbon emission trading policies from China to confirm that market-based incentive environmental regulation tools can effectively reduce environmental pollution in urban areas. These findings can provide more theoretical support and empirical evidence for the government to use mechanisms of the market to effectively solve pollution problems, improve ecological environment quality, and accelerate the realization of green economy.

Impact of Environmental Protection Tax on carbon intensity in China

In the context of increasingly severe global climate change, finding effective carbon emission reduction strategies has become key to mitigating climate change. Environmental Protection Tax (EPT), as a widely recognized method, effectively promotes climate change mitigation by encouraging emission reduction behaviors and promoting the application of clean technologies. Based on data from 282 cities in China, this paper takes the official implementation of the EPT in 2018 as the policy impact and the cities with increased tax rates for air taxable pollutants as the treatment group and uses DID model to systematically demonstrate the relationship between the implementation of the EPT and carbon intensity (CI) and further explores the possible pollutant emissions and green innovation mediating effects. The findings show that (1) the implementation of EPT can effectively reduce CI by about 4.75%, and this conclusion still holds after considering the robustness of variable selection bias, elimination of other normal effects, policy setting time bias, and self-selection bias. (2) The implementation of EPT can reduce CI by reducing pollutant emissions and improving the level of green innovation. (3) There is obvious regional heterogeneity in the carbon reduction effect of EPT, and the implementation of EPT has a more significant effect on CI in medium-tax areas, low environmental concern areas, general cities, and eastern regions. This paper not only provides a new analytical perspective for systematically understanding the carbon emission reduction effect of EPT but also provides policy insights for promoting regional green transformation and advancing carbon peak carbon neutralization.

The impact of the carbon trading market on urban coordinated development in China

Evaluating the effects of China's carbon emission trading scheme (ETS) is crucial for the coordinated development of Chinese cities. Therefore, based on the panel data of 242 cities in China from 2008 to 2019, this paper uses the multi-period difference-in-difference (DID) model to comprehensively evaluate the impact of carbon market on the coordinated development of cities from the perspectives of carbon market policy and carbon market efficiency, and then analyzes the mechanism and heterogeneity of the effect of carbon market efficiency. The results show that both carbon market policy and carbon market efficiency can promote the coordinated development of cities. Science and education expenditure plays a significant intermediary role in the impact of carbon market efficiency on the coordinated development of cities. The heterogeneity test finds that the stricter the performance penalty system, the higher the level of urban coordinated development, and the stronger the effect of carbon market efficiency. The findings of this paper provide policy recommendations for further improving the construction of China's pilot and national ETS and enhancing the coordinated development of Chinese cities.

Political incentives in market-based environmental regulation: Evidence from China's carbon emissions trading scheme

This paper used a multi-period DID model with panel data from 283 Chinese cities between 2006 and 2019 to investigate the emission reduction effects and mechanisms of China's carbon trading scheme. The research revealed that China's Carbon Emissions Trading Scheme not only stimulated businesses to reduce emissions as a market-based environmental regulation policy but also influenced local governments' governance objectives. As a result, the Hawthorne effect inevitably manifested during the experimental period of China's Carbon Emissions Trading Scheme. Further analysis indicated that China's CETS encouraged local authorities to take a more proactive stance towards the balance between environmental preservation and economic growth, aiming to achieve a mutually beneficial outcome. Based on the political stance of local governments, they are likely to simultaneously increase their focus on both economic growth and environmental protection. However, when faced with the conflict between economic advancement and environmental safeguarding, pilot regions prioritized ecological conservation in their practical steps, leading to a modest decline in economic growth. In other words, the government's high-profile announcements may not always manifest in actual deeds. In practice, local authorities tend to allocate more administrative resources to areas highly prioritized by the central government. Furthermore, the extended analysis reveals that China's CETS has resulted in a reduction in social welfare due to a shift in governance priorities influenced by political incentives. Therefore, fine-tuning the performance evaluation mechanism, preventing any bias towards the target preferences of local authorities, and guaranteeing the successful operation of the market mechanism are imperative to achieve truly low-cost and sustainable emissions reductions objectives for CETS.

How the digital infrastructure construction affects urban carbon emissions-A quasi-natural experiment from the "Broadband China" policy

The global emphasis on informatization and low-carbon development is growing. Using staggered Difference-In-Differences (DID) methodology, this research examines the impact of digital infrastructure development on urban carbon dioxide emissions and explores its underlying causal mechanisms. Drawing from a comprehensive 2009-2019 panel dataset of 240 Chinese cities, the study employs the "Broadband China" policy as a reliable proxy for digital infrastructure construction (DIC). The findings indicate that DIC effectively reduces urban carbon dioxide emissions, fostering sustainable low-carbon regional economic development. The results withstand robustness tests, revealing heterogeneous effects, with coastal cities and those with stronger environmental regulations experiencing more significant reductions. The study suggests that upgrading industrial structure and enhancing green innovation capacity are effective methods for DIC to mitigate urban carbon emissions. The paper concludes with policy recommendations, emphasizing leveraging policy dividends, addressing regional disparities, and adopting a multi-path development approach. Providing new insights and empirical data, this research contributes to understanding the relationship between DIC and urban carbon emissions, offering policy guidance for China's carbon reduction efforts and strategic objectives of carbon peaking and neutrality.

Comparing the EU and Chinese carbon trading market operations and their spillover effects

A carbon trading market (CTM) policy for trading carbon dioxide emission rights as a commodity was created to reduce greenhouse gas emissions. CTMs operate differently in different countries and regions, and their interactions deserve an in-depth study. This study focused on the world's largest CTM, the European Union (EU), and the CTM of China, largest carbon-emitting country. First, we evaluate the liquidity and volatility of the two CTMs. Subsequently, the VAR model is used to explore the mean spillover effect between the two markets and the BEKK-GARCH model is used to explore the volatility spillover effect between the two markets. The study concludes that: (1) The liquidity of China's CTM is better than that of the EU's CTM. (2) Both the EU and Chinese CTMs are unstable, but the volatility of the Chinese CTM is lower than that of the EU CTM. (3) Price changes in the EU and Hubei CTMs have a mutual influence. (4) There are interactions between the market fluctuations of the EU CTM and the Shanghai CTM and those of the EU CTM and the Hubei CTM. The results of this study have implications for the construction and development of CTMs in the EU and China.

Spatial-temporal evolution of carbon emissions and spatial-temporal heterogeneity of influencing factors in the Bohai Rim Region, China

The total change in carbon emissions in the Bohai Rim Region (BRR) plays a guiding role in the policy formulation of carbon emission reduction in northern China. Taking the 43 cities in the BRR as an example, the spatial-temporal evolution of carbon emissions in the BRR was analyzed using kernel density estimation (KDE), map visualization, and standard deviation ellipses, and the spatial autocorrelation model was used to explore the spatial clustering of carbon emissions. On this basis, the spatial-temporal heterogeneity of the factors influencing carbon emissions is explained using a Geodetector. The results are as follows: (i) During the study period, the carbon emissions in the BRR were on the rise, the share of carbon emissions in the Beijing-Tianjin-Hebei region (BTHR) and Liaoning Province was decreasing, and the contribution of Shandong Province was gradually enhanced. The spatial distribution of carbon emissions shows a geographical pattern of "middle-high and low-outside." (ii) Carbon emissions from different regions show the characteristics of BTHR > Shandong Province > Liaoning Province. The high-value carbon emission area continues to move from the northwest of Beijing-Tianjin-Hebei to the southeast. (iii) Municipal carbon emissions showed a significant positive spatial correlation in the later part of the study. The high-high aggregation area is in Tianjin, and the low-low aggregation area is in Liaoning Province. (iv) The level of transport development contributes to carbon emissions with the highest growth rate, followed by industrial structure. There are also regional differences in the dominant influences on municipal carbon emission differences. Population size, urbanization, and economic development level are the core influencing factors of carbon emissions in the BTHR, Shandong Province, and Liaoning Province, respectively. In addition, the explanatory power of the interaction between the level of economic development and other factors on carbon emissions is at a high level.

The impact of China's carbon trading policy on enterprises' energy-saving behavior

This paper mainly investigates whether emissions trading for pollutant permits more effective. By employing difference-in-differences method and a compressive firm-level dataset, we evaluate the impact of carbon trading system pilot cities policy on enterprises' energy-saving behavior. The findings indicate that after carbon trading system pilot cities policy, enterprises' coal consumption and coal intensity decreased by almost 34 % and 33 % respectively. The policy effect is more pronounced for larger companies and for firms in energy-intensive sectors. Moreover, the policy effect becomes stronger over time. Our results satisfy the common trend assumption. Meanwhile, the investment in equipment and output are increased, which prove emissions marketization could bring about substantial improvements in productivity.

Can China's carbon intensity constraint policies improve carbon emission performance? Evidence from regional carbon emissions

Carbon Intensity Constraint Policies (CICPs) are vital for addressing climate change challenges and advancing sustainable development. Since 2010, China has rolled out three five-year CICPs. However, there is limited understanding of their impact on carbon emission performance (CEP). Addressing this, this study pioneers the exploration of the CICP's impact on China's CEP. Drawing from government intervention and green paradox theories, this study highlights a concerning scenario: local governments achieve emission targets via excessive intervention. For deeper insights, this study melds the overall technology frontier concept with a non-radial, non-angle directional distance function, introducing a novel efficiency model rooted in the Data Envelopment Analysis (DEA) method. This offers a CEP measure across 30 Chinese provincial regions from 2002 to 2019. Using the quasi-difference-in-differences (quasi-DID) and moderated mediation models, this study ascertains the presence of the green paradox, uncovers its reasons, and suggests mitigation strategies. The results indicate that high government intervention diminishes CEP. This negative effect intensifies under greater regional fiscal pressure. Alarmingly, local authorities' eagerness to meet targets shows a counterproductive, inverted N-shaped trend regarding CICPs' time-based influence on regional CEP. Moreover, the impact varies based on regional economic development levels and stages. This study has ensured the robustness of the findings via parallel trend tests, parallel exclusion policies, a strengthened quasi-DID framework, and diverse control variable configurations. This study underscores the need for more balanced government intervention. It offers valuable policy insights, guiding China's upcoming CICP phase to realize the ambition of peaking carbon by 2030 and achieving carbon neutrality by 2060.

Can carbon emission trading improve carbon emission performance? Evidence from a quasi-natural experiment in China

Carbon emission trading policies play a key role in reducing carbon emissions through market-based mechanisms. In the context of China's carbon neutrality goals and carbon peaking targets, it is important to predict and evaluate the effectiveness of such policies. The combined impact of carbon trading policies on carbon emission reduction and economic output has not been well investigated in previous studies. In this study, the impact of carbon emission trading policies on regional carbon emission performance was assessed through mechanism analysis and empirical tests. The mechanism analysis showed that carbon emission intensity reduction relied on three mediating effects: technological innovation incentives, industrial structure optimization, and energy substitution. For the empirical test, the multi-time difference-in-differences (DID) method was adopted to study the impact using panel data from 30 provinces in China between 2005 and 2019. Moreover, the specific impact mechanism was further tested using mediating effects. The results showed that China's carbon trading policy has significantly affected the carbon emission performance of the pilot regions, and factors such as GDP per capita, urbanization level, and capital-labor ratio have notably contributed to the reduction of carbon emission intensity. The proportions of the three mediating effects in the total effect were estimated to be 60.98%, 23.17%, and 10.14%, respectively. This study provides an empirical approach to the study of the impact of carbon trading policy on carbon emission reduction and economic output and can serve as a reference for addressing climate change and alleviating conflicts between the environment and economic growth in similar regions.

Carbon emissions trading scheme and regional total factor carbon productivity: based on temporal-spatial dual perspectives

The carbon emissions trading scheme (CETS) in China is an important market-based environmental policy mechanism for decreasing carbon emissions. This paper calculates the total factor carbon productivity (TFCP) based on data from 275 cities in China from 2007 to 2020 using the DEA method and investigates the impact of the CETS on regional TFCP using the differences-in-differences (DID) method, all against the backdrop of carbon peaking and carbon neutrality. The research findings reveal that CETS has consistently improved TFCP in pilot cities, and this conclusion has held up following a number of robustness tests. Temporal heterogeneity experiments demonstrate that as implementation time increases, the enhancing effect takes on an inverted "U-shaped" structure with a 7-year effective lifetime. Spatial heterogeneity studies reveal that as one moves away from the pilot cities, the policy effect on surrounding cities' TFCP is inhibited, followed by facilitation. CETS policies can influence regional TFCP through the effects of green innovation and industry upgrading, according to mediation mechanism testing. We present policy recommendations based on the research findings for meeting the "dual" carbon goals and strengthening the carbon trading mechanism.

Simulation analysis of the three-party evolutionary game of green building market players under carbon trading policy

Previous studies mainly focus on the game analysis of green building development under carbon tax policy, while carbon trading, as one of the important means to promote low-carbon development, is rarely mentioned in promoting the development of the green building market. Based on this, to study the impact of carbon trading policy on the development of the green building market, this study combines prospect theory for carbon trading to build a three-way evolutionary game model of developer-government-consumer. It studies the influencing causes of green building market development under the carbon trading mechanism from the whole perspective. The study shows the existence of a carbon trading policy helps the development of the green building market. In the presence of a carbon trading market, the government's punishment, subsidies, and the setting of carbon prices influence the development of the green building market. In addition, the percentage of carbon emissions bought, the potential benefits, and the selling price also affect the chance of consumers buying green buildings to a greater or lesser extent. This study introduces prospect theory into the developer-government-consumer three-way evolutionary game model, which enriches the research perspective of each subject's behavior in the green building market. It provides theoretical support for developers, governments, and consumers to collaborate to promote the coordination and development of the green building market. It has policy implications for promoting the green and high-quality development of the construction industry.

Carbon emission reduction effects of green finance reform and innovation pilot zones policy: evidence from the prefecture-level city in China

The establishment of green finance reform and innovation pilot zones is an important practical exploration to achieve carbon emission reduction goals through green finance in China. Based on the panel data of 282 Chinese prefecture-level cities from 2006 to 2019, this paper examines the mechanism of China's green financial reform and innovation pilot zone policy (GFRI) on urban carbon emissions (CE) and carbon emission efficiency(CEE) using difference-in-differences model. The study shows that GFRI has a significant carbon emission reduction effect, which is reflected in the significant reduction of urban CE and the improvement of urban CEE. GFRI achieves carbon emission reduction by promoting urban green innovation, while the mediating effect of financial agglomeration has not been verified. The results of heterogeneity analysis show that GFRI has more significant effects on carbon emission reduction in non-resource-based cities, large-scale cities and cities with strict environmental regulation. Financial development and digital infrastructure play a positive moderating role on the carbon emission reduction effect of GFRI. This study provides empirical evidence and policy insights from the Chinese city level for deepening the green finance policy and promoting urban low-carbon development.

Impact of China's carbon emissions trading scheme on urban air quality: a time-varying DID model

Using panel data for 277 Chinese cities, this paper applies a time-varying difference-in-differences (DID) model to empirically test the impact of China's carbon emissions trading scheme (ETS) on urban air quality, and further explores its heterogeneity and the mechanisms involved. The results show that ETS can improve urban air quality. This conclusion remains robust through a series of robustness tests, including PSM-DID estimation, varying window periods, exclusion of significant events, lag phase, and placebo tests. The dynamic effect test indicates that ETS has a continuous and effective effect on improving urban air quality. Mechanism analysis reveals that the degree of marketization can enhance the improvement effect that ETS has on urban air quality. Meanwhile, industrial structure upgrading and green technology innovation are important mechanisms by which pilot ETS policy improves urban air quality. Regional heterogeneity analysis finds that ETS only improves urban air quality in eastern and central regions.

How Does Emissions Trading Affect the Efficiency of Enterprise Resource Allocation? Evidence From China

Emission trading policies can provide environmental incentives for businesses, leading to a reduction in pollution emissions and promoting sustainable environmental development. Previous research indicated the significant impact of market-based environmental regulations on emission reduction by businesses, however, there is a lack of in-depth examination from the perspective of overall corporate management efficiency. In this study, we conducted research using the 2007 SO2 emission trading pilot program as a quasi-natural experiment to investigate the mechanisms and effects of emission trading systems on corporate resource allocation efficiency. The study found that the implementation of emission trading systems significantly improves corporate resource allocation efficiency. Furthermore, through market regulation and administrative supervision mechanisms, corporate resource allocation efficiency can be further enhanced. However, emission trading systems have heterogeneous effects on resource allocation efficiency, with a stronger promotion effect on optimizing resource allocation in cases of greater financing constraints and higher levels of corporate governance. This study provides important policy insights for further promoting market-based environmental regulation reforms and improving corporate resource allocation efficiency.

How does civil aviation achieve sustainable low-carbon development? - An abatement-cost perspective

With the rapid development of civil aviation, carbon emissions have brought severe environmental problems. Realizing efficient and sustainable carbon emission reduction is of great significance for achieving green development in civil aviation sector. Therefore, in the process of pursuing civil aviation carbon emission reduction goals, it is necessary to further consider how to achieve emission reduction at the lowest cost. Based on the accurate carbon emission performance evaluation, the carbon abatement cost among different representative airlines have been systematically compared. The main work and findings of this study can be summarized in the following three aspects. Firstly, a new nonparametric shadow price measurement method was constructed based on the Slacks-Based Measurement Data Envelopment Analysis (SBM-DEA). This can better reflect the essence of efficiency evaluation and the calculated shadow price results are more consistent with the real market. Secondly, the average value of carbon emission efficiency has experienced a fluctuating downward trend from 2011 to 2017, indicating that the carbon emission efficiency of global airlines has decreased. Thirdly, the average value of the shadow price is generally between 313.4 and 398.4 dollars/ton, showing an "up-down-up" trend, and reaching a peak of 398.4 dollars/ton in 2014. This can provide a basis for low-carbon policy makers in the civil aviation sector, and also provide reference for different types of airlines to achieve low-cost emission reduction.

The impact of China's energy saving and emission reduction demonstration city policy on urban green technology innovation

Urban green technology innovation (UGTI) is strongly tied to environmental regulations, which can successfully balance economic and environmental benefits. Selecting the panel data for 280 Chinese cities during 2006-2019, we take the energy saving and emission reduction (ESER) demonstration city policy as a quasi-natural experiment, then employ the difference-in-differences model to examine the effect and its mechanisms of ESER policy on UGTI. Empirical results show that the ESER policy can significantly promote UGTI, especially in the western region, the northern region, and cities with weak government environmental attention. At the same time, China's ESER policy has a stronger promoting effect on UGTI in cities where environmental targets are more stringent. Mechanism analysis shows that the policy mainly promotes UGTI through two channels: increasing the proportion of science and technology expenditure in fiscal expenditure and upgrading the structure of the industry. In addition, we find that the development of UGTI has positive environmental effects by lowering carbon emissions and air pollution. The findings not only enrich the literature on environmental regulation policies and UGTI at the theoretical level, but also provide references for policymakers to specific implementation methods in further enforcing environmental regulation policies to improve UGTI.

Carbon reduction behavior of waste power battery recycling enterprises considering learning effects

The carbon reduction behavior of waste power battery recycling (WPBR) enterprises is essential for promoting resource conservation and environmental protection. Introducing the learning effects of carbon reduction research and development (R&D) investment, this study constructs an evolutionary game model between local governments and WPBR enterprises to study the behavior choice of carbon reduction. The paper explores the evolutionary process and factors affecting carbon reduction behavior choices of WPBR enterprises from internal R&D motivation and external regulation perspectives. The critical results reveal that the existence of learning effects significantly reduces the probability of environmental regulation by local governments while effectively increasing the probability of WPBR enterprises implementing carbon reduction. The learning rate index positively correlates with the likelihood of enterprises implementing carbon emissions reduction. In addition, carbon reduction subsidies considerably maintain considerably negative relation with the probability of enterprise carbon reduction behavior. The following conclusions are drawn: (1) The learning effect of carbon reduction R&D investment is the intrinsic driving force for WPBR enterprises' carbon reduction behavior, which can promote enterprises to proactively implement carbon reduction under fewer constraints of government environmental regulation; (2) Pollution fines and carbon trade prices in environmental regulation can promote enterprises carbon reduction, while carbon reduction subsidies inhibit their reduction behavior; (3) There exists an evolutionarily stable strategy between government-enterprise game only under the dynamic mechanism. The research provides insights for decision-making on enterprises' carbon reduction R&D investment and local government environmental regulation policy under carbon reduction targets.

The impact of carbon quota allocation and low-carbon technology innovation on carbon market effectiveness: a system dynamics analysis

As the problems of "valuing compliance over trading" and quota over-allocation seriously affect the effectiveness of China's national carbon emission trading (CET) market, the quota auction mechanism will be introduced timely to solve these problems. Since implementing the quota auction means reduced free quotas, regulated enterprises are more motivated to pursue low-carbon technology innovation (L-CTI). On these grounds, by establishing a system dynamics model of the national CET market and designing seven scenarios for simulation analysis, this paper investigates the impact of quota auction and L-CTI on the emission reduction effectiveness and cost effectiveness of the national CET market. The results indicate that for the national CET market, introducing quota auction is conducive to decreasing the CET price and improving its liquidity and emission reduction effectiveness, which is one of the quota allocation mechanisms to improve the CET market effectiveness at present. However, the quota auction will increase the abatement cost and reduce the cost effectiveness. Therefore, to improve the institutional performance of China's CET system, it is necessary to conduct L-CTI to alleviate the increasing abatement cost caused by quota auction, and thus improve the emission reduction effectiveness and cost effectiveness of the national CET market.

The carbon reduction effects of stepped carbon emissions trading and carbon capture and storage on hybrid wind-PV-thermal- storage generation operating systems

To accelerate the low-carbon transformation of the power industry, a range of carbon emission reduction policies and technologies have emerged. However, the current China's carbon emissions trading (CET) policy is inadequate in encouraging power generation enterprises to take proactive measures towards emission reduction due to challenges like fixed and low carbon prices. The high proportion of renewable energy in electricity consumption also faces significant challenges due to the unpredictable nature of wind and PV energy. Therefore, this paper applies stepped CET mechanism, energy storage system (ES) system and carbon capture and storage (CCS) mechanism together to hybrid renewable energy system, aiming to study their synergistic carbon emission reduction effect. Firstly, the paper constructs the stepped CET model considering incentives and penalties. Secondly, the stepped CET model, ES system and CCS are jointly introduced into the hybrid renewable energy system. Finally, a scenario analysis is conducted to investigate the synergistic effect of various carbon emissions reduction policies and technologies in the operation of power generation systems. The results show that: i) compared with traditional CET, the stepped CET increases renewable energy consumption by 0.12% and reduces carbon emissions by 0.6%; ii) the introduction of stepped CET and ES equipment together consumes an additional 36.1% of renewable energy and reduces carbon emissions by 32.4%; iii) based on stepped CET model and ES equipment, the introduction of CCS system reduces carbon emissions by 29.4%.

Carbon allowance allocation based on comprehensive performance of carbon emissions: Case of typical industries in Zhengzhou

Studying the comprehensive performance of industrial carbon emission has profound significance for improving carbon allowance allocation scheme and achieving the carbon neutrality target. The paper selects 181 enterprises in Zhengzhou as the case, a comprehensive carbon emission performance indicator system and a carbon allowance allocation model were established, and compared with other allocation schemes (historical/baseline method). The results showed that the overall differences in the comprehensive performance evaluation indicator of carbon emissions in typical industries in Zhengzhou were obvious, and there was a correlation with the characteristics of industrial production activities. The overall emission reduction of Zhengzhou was 244.33×103t, and the emission reduction ratio was 7.94% by simulating carbon allowance allocation under the comprehensive performance. The carbon allowance allocation method based on the comprehensive performance has the strongest restraint on the "high emission, low performance" industry, which is more equitable and more conducive to carbon emission reduction. In the future, it will be recommended to give full play to the leading role of the government, implement industrial carbon allowance allocation based on the comprehensive performance evaluation of carbon emissions, to achieve multi-objectives of resource conservation, environmental pollution abatement, and carbon reduction.

The combining and cooperative effects of carbon price and technological innovation on carbon emission reduction: Evidence from China's industrial enterprises

To achieve the carbon peaking and neutrality targets in China, carbon price and technological innovation will play increasingly important roles in recent future. It is widely-known that carbon price and technological innovation can contribute significantly to emission reduction, respectively; but it is still unclear whether the cooperation effects of carbon price and technological innovation would be positive or negative. In this paper, we assume that there are 3 types of emission reduction measures in China's industrial enterprises, which are improvement of energy efficiency, adjustment of energy structure, and substitution of pollution inputs and non-pollution inputs; then we introduce carbon price and technological innovation respectively and simultaneously, and establish 12 scenarios based on the Data Envelopment Analysis models combined with material balance principal (DEA-MBP), and estimate the additional emission reductions and additional production costs of China's industrial enterprises when carbon price and technological innovation exist respectively or simultaneously. The counterfactually estimating results show that there would be significant regional and sectorial heterogeneities in carbon emission reduction characteristics for China's industrial enterprises. If low-carbon technologies in some sectors have the ability to reduce carbon emissions at the expense of high additional production cost, carbon pricing policies would encourage enterprises to adopt new mitigation technologies and increase additional emission reduction by more than 20%, especially technologies focusing on the adjustment of energy structure and the substitution of pollution inputs by non-pollution inputs. However, in some sectors which have already been covered by carbon pricing policies, the additional carbon pricing policy may not have a significant effect on emission reduction, and the emission reduction would decrease by 10%.

Study on the initial carbon quota allocation and spatial balance compensation strategy at the provincial level in China

With the official national unified carbon market launch on July 16, 2021, the allocation and trading of initial carbon quotas between regions will become the focus of research in the future. Based on a reasonable regional initial carbon quota allocation, introducing the concept of carbon ecological compensation and formulating differentiated emission reduction strategies according to the characteristics of different provinces can better guarantee the realization of China's carbon emission reduction goals. Based on this, this paper first analyzes the distribution effects under different distribution principles from the perspective of fairness and efficiency. Secondly, the Pareto optimal multi-objective particle swarm optimization (Pareto-MOPSO) algorithm is used to build the initial carbon quota allocation optimization configuration model to optimize the allocation results. The optimal initial carbon quota allocation scheme is determined through the comparative analysis of the allocation results. Finally, we explore the combination of carbon quota allocation and the concept of carbon ecological compensation and formulate the corresponding carbon compensation scheme. This study not only reduces the relative sense of exploitation of carbon quota allocation in different provinces but also contributes to the realization of a carbon peak in 2030 and carbon neutrality in 2060 (the "30.60" double carbon target).

Does the carbon emission rights trading pilot policy aggravate local government fiscal pressure? Evidence from China

The carbon emission rights trading pilot (CERTP) policy is an important measure to promote low-carbon economic development. This pilot policy also affects the entry and survival of enterprises and is thus related to local government fiscal pressure. The objective of this paper is to examine whether the CERTP policy increases local government fiscal pressure. Based on the quasi-natural experiment of China's CERTP policy, using a dataset from 314 prefecture-level cities in China over the period 2005 to 2019, this paper applies the staggered difference-in-differences (DID) model to examine the impact of the CERTP policy on local government fiscal pressure, and further tests the spatial spillover effects and potential mediation mechanisms of this pilot policy. The results indicate that the implementation of the CERTP policy significantly increases local government fiscal pressure, especially in the eastern regions and regions with low economic development levels, which provides further evidence of a causal relationship between the CERTP policy and fiscal pressure. The results of the spatial spillover effects confirm that the implementation of the CERTP policy in neighboring prefecture-level cities would increase local government fiscal pressure in the local region. The results of the mediation mechanism effect reveal that the CERTP policy aggravates local government fiscal pressure by inhibiting the progress of green technology by enterprises, hindering the emergence of new enterprises, and increasing the number of closures of high-carbon emissions enterprises. This paper recommends that when implementing the CERTP policy, it is necessary to weigh the overall impact of the policy, not just its effect on carbon emissions reduction. The fiscal sustainability of local governments cannot be ignored.

The spatial effect of industrial transfer on carbon emissions under firm location decision:A carbon neutrality perspective

Climate change is a global concern. The goal of carbon neutrality and emission peak is a challenge for China and other developing countries. The carbon reduction policy for carbon neutrality and industrial transfer policy will be a research hotspot on carbon emissions. This study analyzed the spatial impact mechanism of industrial transfer on carbon emissions, especially the role of firm location decision and carbon reduction policy. Based on the dynamic deviation-share model, the industrial transfer products of 30 provinces in China during the "Twelfth Five-Year Plan" and "Thirteenth Five-Year Plan" periods were measured. The spatially weighted interaction model based on improved parameters was then utilized to explore the spatial effect of industrial transfer and carbon reduction policy on regional carbon emissions. The results show that the restrictive carbon reduction policy through centrifugal effect lead to the location shift of manufacturing firms. Industrial transfer and carbon emissions are significantly related. The restrictive carbon reduction policy has significant spatial emission reduction effect. The carbon reduction policy and industrial transfer level of different region comprehensively were the key factors affecting China's carbon neutral goal. The findings have implications for optimizing the scheme of carbon emission reduction tasks allocation between regions.

Does China's Carbon Trading Pilot Policy Reduce Carbon Emissions? Empirical Analysis from 285 Cities

This article studies the influence of the Carbon Trading Pilot Policy (CTPP) on carbon emissions by constructing the balanced panel data from 2003 to 2020 for 285 cities in China above the prefecture level. Difference-in-Difference (DID) method is used to test the influence and the mechanism. (1) The findings suggested that CTPP has dramatically reduced China's carbon emissions by 6.21%. The parallel trend test shows that the premise of DID is reliable. (2) A variety of robustness tests, such as the instrumental variable method for endogeneity, Propensity Score Matching (PSM) for sample selection bias, variable substitution, time-bandwidth change, and exclusion of policy intervention, show that the conclusion is still robust. (3) The mediation mechanism test indicates that CTPP can promote the reduction in carbon emissions by promoting Green Consumption Transformation (GCT), improving Ecological Efficiency (EE), and promoting Industrial Structure Upgrading (ISU). GCT contributes the most, followed by EE and ISU. (4) The analysis of the heterogeneity reveals that CTPP has a greater effect on carbon emission reduction in central and peripheral cities in China. This study provides policy implications for China and similar developing countries in the face of carbon reduction.

A study on the response of carbon emission rights price to energy price macroeconomy and weather conditions

China's carbon emission trading market has gradually attracted worldwide attention. In this paper, a structural VAR model and Shenzhen, a typical city in China, are selected to study the dynamic relationships between China's carbon emission rights price, energy prices, macroeconomic level, and weather conditions. Shanghai crude oil futures, the first crude oil futures contract in China, is used to describe changes in oil market as a substitute for Daqing crude oil price. The results show that the price of carbon emission rights is mainly affected by its own historical price; and the price of carbon emission rights is positively correlated with crude oil price and natural gas price, but negatively correlated with coal price; the change of macroeconomic level will still have a relatively large impact on carbon emission rights price in the current stage of economic development in China, but this impact is not significant; The impact of weather conditions on the price of carbon emission rights is not obvious. It is found that the launch of the national unified carbon market has indeed achieved certain results, but the situation that China's carbon market is still in its infancy has not been changed; further efforts are needed.

Can carbon emission trading pilot policy drive industrial structure low-carbon restructuring: new evidence from China

Industrial structure low-carbon restructuring is an essential channel to accelerate China's economic growth and fulfilling carbon emission reduction goals. Whether carbon emission trading pilot policy, as an influential carbon reduction instrument, fosters industrial structure low-carbon restructuring is of major significance to green economic development. This paper empirically investigates the shock of the carbon emission trading pilot policy on industrial structure low-carbon restructuring using the differences-in-differences (DID) and synthetic control method (SCM). Statistics reveal that sectors with low carbon productivity, such as electricity, steam, and hot water production and supply, ferrous metal smelting and pressing, etc., and sectors with high carbon productivity, such as electrical equipment and machinery, electronics and telecommunication equipment, etc. The industrial structure did not develop a stable trend of change before the 12th Five-Year Plan, but a stable trend of low-carbon restructuring emerged after such a period. Carbon emission trading pilot policy significantly facilitates industrial structural low-carbon restructuring. Carbon emission trading pilot policy inhibits energy-intensive industries in the industrial sector significantly, which promotes industrial structure low-carbon restructuring. Therefore, policymakers need to develop a nationwide carbon emission trading market that includes more industries to guide production factors to industrial sectors with high carbon productivity for industrial restructuring and dual carbon goals.