IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v10y2018i7p2421-d157439.html
   My bibliography  Save this article

Can China’s Carbon Emissions Trading Rights Mechanism Transform its Manufacturing Industry? Based on the Perspective of Enterprise Behavior

Author

Listed:
  • Yue Dai

    (Economic Management Institute of Nanjing University of Aeronautics and Astronautics, Nanjing 210016, China)

  • Nan Li

    (Economic Management Institute of Nanjing University of Aeronautics and Astronautics, Nanjing 210016, China)

  • Rongrong Gu

    (Business School of Nanjing University of Information Science and Technology, Nanjing 210044, China)

  • Xiaodong Zhu

    (Economic Management Institute of Nanjing University of Aeronautics and Astronautics, Nanjing 210016, China)

Abstract

The pilot policy of carbon emissions trading rights covers six heavy pollution industries in the manufacturing industry and has achieved considerable emission reductions. Based on enterprise behavior, this study analyzes the impact of the carbon emissions trading rights pilot policy on the productivity of manufacturing enterprises. In addition, we examine whether the pilot policy can aid in the transformation and upgrading of China’s manufacturing industry. Furthermore, we examine the influence of carbon emissions trading rights on manufacturing enterprises of different sizes and with different property rights. The results show that the trading rights have not produced a “Porter effect” on the productivity of manufacturing enterprises in China or in subsamples based on the nature of enterprise ownership. The impact of the carbon trading rights on the productivity of state-owned manufacturing enterprises in the pilot provinces is based on the compliance cost hypothesis. Therefore, the pilot policy has yet to achieve coordinated economic, social, and environmental development. Lastly, we put forward several policy suggestions on the coordinated development of a carbon trading policy and manufacturing enterprises from the perspective of the government, enterprises, and society.

Suggested Citation

  • Yue Dai & Nan Li & Rongrong Gu & Xiaodong Zhu, 2018. "Can China’s Carbon Emissions Trading Rights Mechanism Transform its Manufacturing Industry? Based on the Perspective of Enterprise Behavior," Sustainability, MDPI, vol. 10(7), pages 1-16, July.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:7:p:2421-:d:157439
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/10/7/2421/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/10/7/2421/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Aarstad, Jarle & Kvitastein, Olav A. & Jakobsen, Stig-Erik, 2016. "Related and unrelated variety as regional drivers of enterprise productivity and innovation: A multilevel study," Research Policy, Elsevier, vol. 45(4), pages 844-856.
    2. Oestreich, A. Marcel & Tsiakas, Ilias, 2015. "Carbon emissions and stock returns: Evidence from the EU Emissions Trading Scheme," Journal of Banking & Finance, Elsevier, vol. 58(C), pages 294-308.
    3. Fang, Guochang & Tian, Lixin & Liu, Menghe & Fu, Min & Sun, Mei, 2018. "How to optimize the development of carbon trading in China—Enlightenment from evolution rules of the EU carbon price," Applied Energy, Elsevier, vol. 211(C), pages 1039-1049.
    4. Li, Guangyao & Yang, Jin & Chen, Dingjiang & Hu, Shanying, 2017. "Impacts of the coming emission trading scheme on China’s coal-to-materials industry in 2020," Applied Energy, Elsevier, vol. 195(C), pages 837-849.
    5. Zhao, Xin-gang & Wu, Lei & Li, Ang, 2017. "Research on the efficiency of carbon trading market in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 1-8.
    6. Cheong, Tsun Se & Wu, Yanrui, 2014. "The impacts of structural transformation and industrial upgrading on regional inequality in China," China Economic Review, Elsevier, vol. 31(C), pages 339-350.
    7. Qingyou Yan & Yaxian Wang & Tomas Baležentis & Yikai Sun & Dalia Streimikiene, 2018. "Energy-Related CO 2 Emission in China’s Provincial Thermal Electricity Generation: Driving Factors and Possibilities for Abatement," Energies, MDPI, vol. 11(5), pages 1-25, April.
    8. Lin, Boqiang & Jia, Zhijie, 2018. "Impact of quota decline scheme of emission trading in China: A dynamic recursive CGE model," Energy, Elsevier, vol. 149(C), pages 190-203.
    9. Cui, Lian-Biao & Fan, Ying & Zhu, Lei & Bi, Qing-Hua, 2014. "How will the emissions trading scheme save cost for achieving China’s 2020 carbon intensity reduction target?," Applied Energy, Elsevier, vol. 136(C), pages 1043-1052.
    10. Zhang, Cheng & Wang, Qunwei & Shi, Dan & Li, Pengfei & Cai, Wanhuan, 2016. "Scenario-based potential effects of carbon trading in China: An integrated approach," Applied Energy, Elsevier, vol. 182(C), pages 177-190.
    11. Dylan Rassier & Dietrich Earnhart, 2010. "Does the Porter Hypothesis Explain Expected Future Financial Performance? The Effect of Clean Water Regulation on Chemical Manufacturing Firms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(3), pages 353-377, March.
    12. Jan Bebbington & Carlos Larrinaga-Gonzalez, 2008. "Carbon Trading: Accounting and Reporting Issues," European Accounting Review, Taylor & Francis Journals, vol. 17(4), pages 697-717.
    13. Ralf Martin & Mirabelle Muûls & Ulrich J. Wagner, 2016. "The Impact of the European Union Emissions Trading Scheme on Regulated Firms: What Is the Evidence after Ten Years?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(1), pages 129-148.
    14. Rui Xie & Chao Gao & Guomei Zhao & Yu Liu & Shengcheng Xu, 2017. "Empirical Study of China’s Provincial Carbon Responsibility Sharing: Provincial Value Chain Perspective," Sustainability, MDPI, vol. 9(4), pages 1-16, April.
    15. Brian C. Murray & Richard G. Newell & William A. Pizer, 2009. "Balancing Cost and Emissions Certainty: An Allowance Reserve for Cap-and-Trade," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 3(1), pages 84-103, Winter.
    16. Yue, Xian-Ping, 2017. "Behavior of inter-enterprises patent portfolio for different market structure," Technological Forecasting and Social Change, Elsevier, vol. 120(C), pages 24-31.
    17. Yong Wang & Han Zhao & Fumei Duan & Ying Wang, 2018. "Initial Provincial Allocation and Equity Evaluation of China’s Carbon Emission Rights—Based on the Improved TOPSIS Method," Sustainability, MDPI, vol. 10(4), pages 1-27, March.
    18. Nomura, Noboru & Akai, Makoto, 2004. "Willingness to pay for green electricity in Japan as estimated through contingent valuation method," Applied Energy, Elsevier, vol. 78(4), pages 453-463, August.
    19. James A. Brander & M. Scott Taylor, 1997. "International Trade and Open-Access Renewable Resources: The Small Open Economy Case," Canadian Journal of Economics, Canadian Economics Association, vol. 30(3), pages 526-552, August.
    20. Zhang, Yue-Jun & Peng, Yu-Lu & Ma, Chao-Qun & Shen, Bo, 2017. "Can environmental innovation facilitate carbon emissions reduction? Evidence from China," Energy Policy, Elsevier, vol. 100(C), pages 18-28.
    21. Cong, Ren & Lo, Alex Y., 2017. "Emission trading and carbon market performance in Shenzhen, China," Applied Energy, Elsevier, vol. 193(C), pages 414-425.
    22. Callon, Michel, 2009. "Civilizing markets: Carbon trading between in vitro and in vivo experiments," Accounting, Organizations and Society, Elsevier, vol. 34(3-4), pages 535-548, April.
    23. Hamamoto, Mitsutsugu, 2006. "Environmental regulation and the productivity of Japanese manufacturing industries," Resource and Energy Economics, Elsevier, vol. 28(4), pages 299-312, November.
    24. Bai, Chong-en & Li, David D. & Wang, Yijiang, 1997. "Enterprise Productivity and Efficiency: When Is Up Really Down?," Journal of Comparative Economics, Elsevier, vol. 24(3), pages 265-280, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haoran Zhang & Rongxia Zhang & Guomin Li & Wei Li & Yongrok Choi, 2020. "Has China’s Emission Trading System Achieved the Development of a Low-Carbon Economy in High-Emission Industrial Subsectors?," Sustainability, MDPI, vol. 12(13), pages 1-20, July.
    2. Zhou, Qianling & Li, Tao & Gong, Liutang, 2022. "The effect of tax incentives on energy intensity: Evidence from China's VAT reform," Energy Economics, Elsevier, vol. 108(C).
    3. Rui Cao & Yanling Xiao & Fengxue Yin, 2023. "Spatio-Temporal Evolution of High-Quality Development and the Impact of Carbon Emissions Trading Schemes," Sustainability, MDPI, vol. 15(4), pages 1-18, February.
    4. Shijie Wang & Laijun Zhao & Yong Yang & Chenchen Wang & Jian Xue & Xin Bo & Deqiang Li & Dengguo Liu, 2019. "A Joint Control Model Based on Emission Rights Futures Trading for Regional Air Pollution That Accounts for the Impacts on Employment," Sustainability, MDPI, vol. 11(21), pages 1-17, October.
    5. Li, Meng & Gao, Yuning & Meng, Bo & Yang, Zhusong, 2021. "Managing the mitigation: Analysis of the effectiveness of target-based policies on China's provincial carbon emission and transfer," Energy Policy, Elsevier, vol. 151(C).
    6. Fushuai Wang & Wenxia Cai & Ehsan Elahi, 2021. "Do Green Finance and Environmental Regulation Play a Crucial Role in the Reduction of CO 2 Emissions? An Empirical Analysis of 126 Chinese Cities," Sustainability, MDPI, vol. 13(23), pages 1-20, November.
    7. Guiliang Tian & Suwan Yu & Zheng Wu & Qing Xia, 2022. "Study on the Emission Reduction Effect and Spatial Difference of Carbon Emission Trading Policy in China," Energies, MDPI, vol. 15(5), pages 1-20, March.
    8. Sheng Xu & Wenran Pan & Demei Wen, 2023. "Do Carbon Emission Trading Schemes Promote the Green Transition of Enterprises? Evidence from China," Sustainability, MDPI, vol. 15(8), pages 1-28, April.
    9. Li, Kai & Yan, Yaxue & Zhang, Xiaoling, 2021. "Carbon-abatement policies, investment preferences, and directed technological change: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    10. Enci Wang & Jianyun Nie & Hong Zhan, 2022. "The Impact of Carbon Emissions Trading on the Profitability and Debt Burden of Listed Companies," Sustainability, MDPI, vol. 14(20), pages 1-20, October.
    11. Wu, Rongxin & Tan, Zhizhou & Lin, Boqiang, 2023. "Does carbon emission trading scheme really improve the CO2 emission efficiency? Evidence from China's iron and steel industry," Energy, Elsevier, vol. 277(C).
    12. Hong Qiu & Genhua Hu & Yuhong Yang & Jeffrey Zhang & Ting Zhang, 2020. "Modeling the Risk of Extreme Value Dependence in Chinese Regional Carbon Emission Markets," Sustainability, MDPI, vol. 12(19), pages 1-15, September.
    13. Song, Malin & Zheng, Huanyu & Shen, Zhiyang, 2023. "Whether the carbon emissions trading system improves energy efficiency – Empirical testing based on China's provincial panel data," Energy, Elsevier, vol. 275(C).

    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. Wang, Xu & Zhu, Lei & Fan, Ying, 2018. "Transaction costs, market structure and efficient coverage of emissions trading scheme: A microlevel study from the pilots in China," Applied Energy, Elsevier, vol. 220(C), pages 657-671.
    2. Shengxian Ge & Xianyu Yu & Dequn Zhou & Xiuzhi Sang, 2019. "The Integrated Effect of Carbon Emissions Trading and Pollution Rights Trading for Power Enterprises—A Case Study of Chongqing," Sustainability, MDPI, vol. 11(11), pages 1-17, June.
    3. Weng, Qingqing & Xu, He, 2018. "A review of China’s carbon trading market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 613-619.
    4. Wu, Rongxin & Tan, Zhizhou & Lin, Boqiang, 2023. "Does carbon emission trading scheme really improve the CO2 emission efficiency? Evidence from China's iron and steel industry," Energy, Elsevier, vol. 277(C).
    5. Wang, Xiao-Qing & Su, Chi-Wei & Lobonţ, Oana-Ramona & Li, Hao & Nicoleta-Claudia, Moldovan, 2022. "Is China's carbon trading market efficient? Evidence from emissions trading scheme pilots," Energy, Elsevier, vol. 245(C).
    6. Liu, Jing-Yue & Zhang, Yue-Jun, 2021. "Has carbon emissions trading system promoted non-fossil energy development in China?," Applied Energy, Elsevier, vol. 302(C).
    7. Tang, Ling & Wang, Haohan & Li, Ling & Yang, Kaitong & Mi, Zhifu, 2020. "Quantitative models in emission trading system research: A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 132(C).
    8. Chang, Kai & Chen, Rongda & Chevallier, Julien, 2018. "Market fragmentation, liquidity measures and improvement perspectives from China's emissions trading scheme pilots," Energy Economics, Elsevier, vol. 75(C), pages 249-260.
    9. 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.
    10. Zhao, Lili & Wen, Fenghua & Wang, Xiong, 2020. "Interaction among China carbon emission trading markets: Nonlinear Granger causality and time-varying effect," Energy Economics, Elsevier, vol. 91(C).
    11. Yue-Jun Zhang & Jing-Yue Liu, 2019. "Does carbon emissions trading affect the financial performance of high energy-consuming firms in China?," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 95(1), pages 91-111, January.
    12. Zhang, Weijie & Zhang, Ning & Yu, Yanni, 2019. "Carbon mitigation effects and potential cost savings from carbon emissions trading in China's regional industry," Technological Forecasting and Social Change, Elsevier, vol. 141(C), pages 1-11.
    13. Lin, Boqiang & Jia, Zhijie, 2019. "Impacts of carbon price level in carbon emission trading market," Applied Energy, Elsevier, vol. 239(C), pages 157-170.
    14. Wen-Hsien Tsai, 2018. "Carbon Taxes and Carbon Right Costs Analysis for the Tire Industry," Energies, MDPI, vol. 11(8), pages 1-22, August.
    15. Zhang, Yue-Jun & Liang, Ting & Jin, Yan-Lin & Shen, Bo, 2020. "The impact of carbon trading on economic output and carbon emissions reduction in China’s industrial sectors," Applied Energy, Elsevier, vol. 260(C).
    16. Jin, Chenfei & Tsai, Fu-Sheng & Gu, Qiuyang & Wu, Bao, 2022. "Does the porter hypothesis work well in the emission trading schema pilot? Exploring moderating effects of institutional settings," Research in International Business and Finance, Elsevier, vol. 62(C).
    17. Huiqin Jiang & Xinxiao Shao & Xiao Zhang & Jianqiang Bao, 2017. "A Study of the Allocation of Carbon Emission Permits among the Provinces of China Based on Fairness and Efficiency," Sustainability, MDPI, vol. 9(11), pages 1-17, November.
    18. Xin-gang Zhao & Yu-zhuo Zhang, 2018. "The System Dynamics (SD) Analysis of the Government and Power Producers’ Evolutionary Game Strategies Based on Carbon Trading (CT) Mechanism: A Case of China," Sustainability, MDPI, vol. 10(4), pages 1-18, April.
    19. Yinpeng Zhang & Zhixin Liu & Yingying Xu, 2018. "Carbon price volatility: The case of China," PLOS ONE, Public Library of Science, vol. 13(10), pages 1-15, October.
    20. Bingxin Zeng & Jun Xie & Xiaobing Zhang & Yang Yu & Lei Zhu, 2020. "The impacts of emission trading scheme on China’s thermal power industry: A pre-evaluation from the micro level," Energy & Environment, , vol. 31(6), pages 1007-1030, September.

    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:10:y:2018:i:7:p:2421-:d:157439. 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.