Search Results (8)

China launched the National Carbon Emissions Trading Market (NCETM) in July 2021, heralding the first nationwide implementation of carbon emissions trading since the 2011 pilot scheme in China. The NCETM serves as a vital policy instrument that employs market mechanisms to regulate and mitigate greenhouse gas emissions. Thus, this study aims to examine how the NCETM in China, as an environmental regulatory policy, impacts environmental protection investment (EPI) made by enterprises. Specifically, the research seeks to address three key questions: (1) Does the NCETM have an impact on corporate EPI? (2) What are the mechanisms underlying the effect of the NCETM on corporate EPI? (3) Additionally, does the impact of the NCETM on corporate EPI vary with the location of the firms? By utilizing financial data from listed firms from 2018 to 2022 and employing the difference-in-differences (DID) model, the empirical results suggest that: (1) NCETM significantly stimulates the increase in EPI by firms. (2) The NCETM promotes environmental investment by inducing higher R&D expenditures. (3) The effects of NCETM on firms’ EPI vary across regions, with the policy only being effective for firms in non-pilot regions that did not engage in the carbon emissions trading market prior to NCETM. This study provides empirical evidence for the microeconomic effects of the NCETM and a useful reference for the implementation of carbon emissions trading policies. Full article

As the country with the largest carbon emissions globally, the effective operation of China’s carbon emissions trading scheme (ETS) is of great importance to the global community in terms of mitigating climate change. This paper considers China’s pilot ETS launched in 2013 as a quasi-natural experiment. Exploring provincial industrial-level data that are more in line with the ETS coverage, the difference-in-difference-in-difference (DDD) model is used to evaluate the impact of the ETS on carbon productivity. Considering different pilot regions and industries, we also analyze the heterogeneous effect of ETS. Moreover, the mediating effects of technical progress and capital investment are explored. We find that China’s pilot ETS boosted carbon productivity. Among pilot regions, the best policy effectiveness appeared in Beijing, while the weakest effectiveness appeared in Chongqing. Among the pilot industries, the pilot ETS had better effectiveness in petrochemical and electric power industries and weaker effectiveness in building materials and transportation industries. Additionally, the pilot ETS promoted carbon productivity through both technological progress and capital investment, and the former contributed more. Our findings can provide empirical references and policy implications for nationwide implementation of ETS to further promote low-carbon economic transformation. Full article

As an essential measure to mitigate the CO₂ emissions, China is constructing a nationwide carbon emission trading (CET) market. The electric power industry is the first sector that will be introduced into this market, but the quota allocation scheme, as the key foundation of market transactions, is still undetermined. This research employed the gross domestic product (GDP), energy consumption, and electric generation data of 30 provinces from 2001 to 2015, a hybrid trend forecasting model, and a three-indicator allocation model to measure the provincial quota allocation for carbon emissions in China’s electric power sector. The conclusions drawn from the empirical analysis can be summarized as follows: (1) The carbon emission peak in China’s electric power sector will appear in 2027, and peak emissions will be 3.63 billion tons, which will surpass the total carbon emissions of the European Union (EU) and approximately equal to 2/3 of the United States of America (USA). (2) The developed provinces that are supported by traditional industries should take more responsibility for carbon mitigation. (3) Nine provinces are expected to be the buyers in the CET market. These provinces are mostly located in eastern China, and account for approximately 63.65% of China’s carbon emissions generated by the electric power sector. (4) The long-distance electric power transmission shifts the carbon emissions and then has an impact on the quotas allocation for carbon emissions. (5) The development and effective utilization of clean power generation will play a positive role for carbon mitigation in China’s electric sector. Full article

China built pilot carbon emission trading schemes in seven regions and established a national carbon trading market in electricity sector in December 2017. This study conducted a questionnaire survey of 570 companies in 29 regions nationwide and found that companies still need to improve mitigation measures regarding fossil fuel combustion, production technology, output adjustment and environmental management. By establishing regression models, influencing factors of carbon emission reduction are identified. Pilot emission trading policy has a significant impact on company emission reduction behaviors. Companies inside or outside the pilot region respond differently to the influencing factors. Companies inside emphasize more on energy price and mitigation potential, while enterprises outside pay more attention to investment and familiarity with technology and policy. Full article

The adoption of emissions trading scheme (ETS) and renewable energy sources (RES) policies have been essential to achieving China’s national targets for reducing CO₂ emissions and developing non-fossil energy sources. The combination of ETS and RES policies raises an important issue: What is the effect of combining ETS and RES policies on the existing carbon market and economy? Focusing on the design of the nationwide carbon market, this paper uses a multi-regional computable general equilibrium (CGE) model to analyze the economic impacts of ETS policy when combined with RES policies in China. The results show that China’s annual ETS emissions cap should decrease by 0.3% to maintain stable CO₂ prices and achieve the targets in China’s intended nationally determined contribution (INDC). It is estimated that the CO₂ price on the nationwide carbon market would decrease by 11–64% when the renewable energy subsidy rate increases from 20 to 100%, and the total trading volume would decrease by 3–25%. The results also show that the combination of an ETS and a feed-in tariff (FIT) results in greater GDP cost and welfare loss in all Chinese regions, increasing the total social cost by 0.01–0.06%. Full article

China’s nationwide emission trading scheme (CN-ETS) is scheduled to be launched in 2017. It is of great urgency and necessity to obtain a good understanding of the participating sectors of CN-ETS in terms of energy utilization and CO₂ emissions. In this regard, it should be noted that the findings may be biased without taking industry heterogeneity into consideration. To this end, a meta-frontier framework with the directional distance function is employed to estimate the CO₂ emission performance (CEP), mitigation potential (MP), and marginal abatement cost (MAC) at sector levels under the meta-frontier and the group-frontier. The results indicate that significant disparities in the CEP, MP, and MAC exist under both frontiers among various sectors, and the sectoral distributions of CEP, MP, and MAC are found to be different between the two frontiers. Additionally, the differences between the two frontiers in terms of CEP, MP, and MAC are considerable, and exhibit unequal distributions among these sectors. Notably, MAC under both frontiers and the difference between them are found to be significantly correlated with the carbon intensity. Finally, policy implications are provided for the government and participating enterprises, respectively. Full article

A pilot regional carbon emission trading scheme (ETS) has been implemented in China for more than two years. An investigation into the impacts of different factors on carbon dioxide (CO₂) emission allowance prices provides guidance for price-making in 2017 when the nation-wide ETS of China will be established. This paper adopts a quantile regression approach to estimate the impacts of different factors in Shanghai emission trading scheme (SH-ETS), namely, economic growth, energy prices and temperature. The empirical analysis shows that: (i) the economic growth in Shanghai leads to a drop in the carbon allowance prices; (ii) the oil price has a slightly positive effect on the allowance prices regardless of the ordinary least squares (OLS) or quantile regression method; (iii) a long-run negative relationship exists between the coal price and the Shanghai emission allowances (SHEA) prices, but a positive interaction under different quantiles, especially the 25%–50% quantiles; (iv) temperature has a significantly positive effect at the 20%–30% quantiles and a conspicuous negative impact at the right tail of the allowances prices. Full article

This paper proposes a real options model for evaluating the biomass power generation investment in China. The uncertainties in the market price of electricity, CO₂ price and straw price are considered. Meanwhile the dynamic relationship between installed capacity and fuel cost, as well as the long-term reduction of subsidy are described. Two scenarios, i.e., with the carbon emission trading scheme existent and non-existent, respectively, is built to empirically analyze the investment of a 25-MW straw-based power generation project. The results show that investors should undertake the investment in 2030 under two scenarios. Investment values are 14,869,254.8 and 37,608,727 Chinese Yuan (RMB), respectively. The implementation of the carbon emission trading scheme theoretically helps improve investment value and advance the most likely optimal investment time. However, the current CO₂ price is not sufficient to advance the most likely optimal investment time. The impacts of several factors, including subsidy policy, CO₂ price, straw price, installed capacity, correlation structure and the validity period of investment, on the optimal investment strategy are also examined. It is suggested that governments take some measures, including increasing subsidy, setting the growth pattern of subsidy and establishing and perfecting a nationwide carbon trading market, to improve the investment environment and attract more investments. Full article