IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i13p10147-d1179911.html
   My bibliography  Save this article

Killing Two Birds with One Stone or Missing One of Them? The Synergistic Governance Effect of China’s Carbon Emissions Trading Scheme on Pollution Control and Carbon Emission Reduction

Author

Listed:
  • Ying Zhang

    (School of Economics and Management, Northeast Forestry University, Harbin 150040, China
    Department of Finance, Harbin Finance University, Harbin 150030, China)

  • Yingli Huang

    (School of Economics and Management, Northeast Forestry University, Harbin 150040, China)

Abstract

Faced with the dual pressure from global climate change and increasing air pollution, China has gradually clarified the adoption of market-based tools to improve the ecological environment. Based on Chinese provincial panel data from 2006 to 2020, this paper analyzes the synergistic governance effect and influence mechanism of China’s carbon emissions trading scheme (ETS) on pollution control and carbon emission reduction by using a multiperiod difference-in-differences (DID) model. The empirical results show that China’s ETS has achieved the synergistic governance effect of pollution control and carbon emission reduction. The heterogeneity analysis shows that ETS can significantly enhance the synergistic governance effect in areas with higher total factor productivity (TFP) and stronger administrative intervention. More importantly, the mechanism analysis shows that China’s ETS promotes the synergistic governance effect of pollution control and carbon emission reduction mainly through industrial structure upgrading and energy structure transformation. The effect contribution values are 22.42% and 9.40%, respectively. This study contributes to deepening the effect of the carbon emissions trading scheme and also provides a reference for the design of a unified carbon trading market in China.

Suggested Citation

  • Ying Zhang & Yingli Huang, 2023. "Killing Two Birds with One Stone or Missing One of Them? The Synergistic Governance Effect of China’s Carbon Emissions Trading Scheme on Pollution Control and Carbon Emission Reduction," Sustainability, MDPI, vol. 15(13), pages 1-25, June.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:13:p:10147-:d:1179911
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/13/10147/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/13/10147/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    2. Streimikiene, Dalia & Roos, Inge, 2009. "GHG emission trading implications on energy sector in Baltic States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(4), pages 854-862, May.
    3. Zhou, Fengxiu & Wang, Xiaoyu, 2022. "The carbon emissions trading scheme and green technology innovation in China: A new structural economics perspective," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 365-381.
    4. Wei, Xinyang & Tong, Qing & Magill, Iain & Vithayasrichareon, Peerapat & Betz, Regina, 2020. "Evaluation of potential co-benefits of air pollution control and climate mitigation policies for China's electricity sector," Energy Economics, Elsevier, vol. 92(C).
    5. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
    6. Abe, Tatsuya & Arimura, Toshi H., 2022. "Causal effects of the Tokyo emissions trading scheme on energy consumption and economic performance," Energy Policy, Elsevier, vol. 168(C).
    7. Yu, Pei & Cai, Zhengfang & Sun, Yongping, 2021. "Does the emissions trading system in developing countries accelerate carbon leakage through OFDI? Evidence from China," Energy Economics, Elsevier, vol. 101(C).
    8. aus dem Moore, Nils & Großkurth, Philipp & Themann, Michael, 2019. "Multinational corporations and the EU Emissions Trading System: The specter of asset erosion and creeping deindustrialization," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 1-26.
    9. Weng, Zhixiong & Liu, Tingting & Wu, Yufeng & Cheng, Cuiyun, 2022. "Air quality improvement effect and future contributions of carbon trading pilot programs in China," Energy Policy, Elsevier, vol. 170(C).
    10. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    11. Eliana La Ferrara & Alberto Chong & Suzanne Duryea, 2012. "Soap Operas and Fertility: Evidence from Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 4(4), pages 1-31, October.
    12. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    13. L. Rachel Ngai & Christopher A. Pissarides, 2007. "Structural Change in a Multisector Model of Growth," American Economic Review, American Economic Association, vol. 97(1), pages 429-443, March.
    14. Pang, Jun & Timilsina, Govinda, 2021. "How would an emissions trading scheme affect provincial economies in China: Insights from a computable general equilibrium model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    15. Liu, Ming & Shan, Yanfei & Li, Yemei, 2022. "Study on the effect of carbon trading regulation on green innovation and heterogeneity analysis from China," Energy Policy, Elsevier, vol. 171(C).
    16. Karan Capoor & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2009," World Bank Publications - Reports 13403, The World Bank Group.
    17. Zhang, Shengling & Wang, Yao & Hao, Yu & Liu, Zhiwei, 2021. "Shooting two hawks with one arrow: Could China's emission trading scheme promote green development efficiency and regional carbon equality?," Energy Economics, Elsevier, vol. 101(C).
    18. Bagayev, Igor & Lochard, Julie, 2017. "EU air pollution regulation: A breath of fresh air for Eastern European polluting industries?," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 145-163.
    19. Malina, Robert & McConnachie, Dominic & Winchester, Niven & Wollersheim, Christoph & Paltsev, Sergey & Waitz, Ian A., 2012. "The impact of the European Union Emissions Trading Scheme on US aviation," Journal of Air Transport Management, Elsevier, vol. 19(C), pages 36-41.
    20. Betz, Regina & Owen, Anthony D., 2010. "The implications of Australia's carbon pollution reduction scheme for its National Electricity Market," Energy Policy, Elsevier, vol. 38(9), pages 4966-4977, September.
    21. Zhang, Wei & Li, Jing & Li, Guoxiang & Guo, Shucen, 2020. "Emission reduction effect and carbon market efficiency of carbon emissions trading policy in China," Energy, Elsevier, vol. 196(C).
    22. Chen, Zhongfei & Zhang, Xiao & Chen, Fanglin, 2021. "Do carbon emission trading schemes stimulate green innovation in enterprises? Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    23. Cao, Libin & Tang, Yiqi & Cai, Bofeng & Wu, Pengcheng & Zhang, Yansen & Zhang, Fengxue & Xin, Bo & Lv, Chen & Chen, Kai & Fang, Kai, 2021. "Was it better or worse? Simulating the environmental and health impacts of emissions trading scheme in Hubei province, China," Energy, Elsevier, vol. 217(C).
    24. repec:wbk:wboper:13402 is not listed on IDEAS
    25. Jia, Zhijie & Lin, Boqiang, 2020. "Rethinking the choice of carbon tax and carbon trading in China," Technological Forecasting and Social Change, Elsevier, vol. 159(C).
    26. Henrik Hasselknippe, 2003. "Systems for carbon trading: an overview," Climate Policy, Taylor & Francis Journals, vol. 3(sup2), pages 43-57, December.
    27. Jong, Thijs & Couwenberg, Oscar & Woerdman, Edwin, 2014. "Does EU emissions trading bite? An event study," Energy Policy, Elsevier, vol. 69(C), pages 510-519.
    28. 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).
    29. Hu, Yucai & Ren, Shenggang & Wang, Yangjie & Chen, Xiaohong, 2020. "Can carbon emission trading scheme achieve energy conservation and emission reduction? Evidence from the industrial sector in China," Energy Economics, Elsevier, vol. 85(C).
    30. Zhongju Liao & Chen Weng & Chen Shen, 2020. "Can public surveillance promote corporate environmental innovation? The mediating role of environmental law enforcement," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(6), pages 1519-1527, November.
    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. Siqing You & Chaoyu Zhang & Han Zhao & Hongli Zhou & Zican Li & Jiayi Xu & Yan Meng, 2023. "Trend Analysis of the Impact of Ecological Governance on Industrial Structural Upgrading under the Dual Carbon Target," Sustainability, MDPI, vol. 15(15), pages 1-15, July.

    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. Yu, Xiaolin & Wan, Kai & Du, Qunyang, 2023. "Can carbon market policies achieve a “point-to-surface” effect?—Quasi-experimental evidence from China," Energy Policy, Elsevier, vol. 183(C).
    2. Wu, Qingyang & Wang, Yanying, 2022. "How does carbon emission price stimulate enterprises' total factor productivity? Insights from China's emission trading scheme pilots," Energy Economics, Elsevier, vol. 109(C).
    3. Zijian Liu & Lian Cai & Yabin Zhang, 2023. "Co-Benefits of China’s Carbon Emissions Trading Scheme: Impact Mechanism and Spillover Effect," IJERPH, MDPI, vol. 20(5), pages 1-13, February.
    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. Hsu, Wen-Tai & Lu, Yi & Luo, Xuan & Zhu, Lianming, 2023. "Foreign direct investment and industrial agglomeration: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 610-639.
    6. Fei Yang & Chunchen Wang, 2023. "Clean energy, emission trading policy, and CO2 emissions: Evidence from China," Energy & Environment, , vol. 34(5), pages 1657-1673, August.
    7. Ling-Yun He & Xiao-Feng Qi, 2021. "Environmental Courts, Environment and Employment: Evidence from China," Sustainability, MDPI, vol. 13(11), pages 1-16, June.
    8. 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.
    9. Gao, Ming, 2023. "The impacts of carbon trading policy on China's low-carbon economy based on county-level perspectives," Energy Policy, Elsevier, vol. 175(C).
    10. Gu, Guangtong & Zheng, Haorong & Tong, Lingyun & Dai, Yaxian, 2022. "Does carbon financial market as an environmental regulation policy tool promote regional energy conservation and emission reduction? Empirical evidence from China," Energy Policy, Elsevier, vol. 163(C).
    11. Yan Xiao & Yan Zhang & Jiekuan Zhang, 2023. "The Impact of Carbon Emission Trading on Industrial Green Total Factor Productivity," Sustainability, MDPI, vol. 15(7), pages 1-18, April.
    12. Weng, Zhixiong & Liu, Tingting & Wu, Yufeng & Cheng, Cuiyun, 2022. "Air quality improvement effect and future contributions of carbon trading pilot programs in China," Energy Policy, Elsevier, vol. 170(C).
    13. Sun, Yajie & Liao, Wen-Chi, 2021. "Resource-Exhausted City Transition to continue industrial development," China Economic Review, Elsevier, vol. 67(C).
    14. Yihao Tian & Lijin Ding & Bin Yang & Feng Peng, 2022. "The Effects of De-Capacity Policy on Steel and Coal Firms’ Profitability: Evidence from China’s Listed Companies," Energies, MDPI, vol. 15(12), pages 1-17, June.
    15. He, Ling-Yun & Chen, Kun-Xian, 2023. "Does China's regional emission trading scheme lead to carbon leakage? Evidence from conglomerates," Energy Policy, Elsevier, vol. 175(C).
    16. Chen, Zhongfei & Zhang, Xiao & Chen, Fanglin, 2021. "Do carbon emission trading schemes stimulate green innovation in enterprises? Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    17. Song, Jinbo & Nie, Rong & Yuan, Hehui & Gao, Jingxin, 2023. "Does the renovation of waste-to-energy incineration plants attenuate the housing price gradient? Evidence from a quasi-natural experiment in Shenzhen, China," Energy Economics, Elsevier, vol. 120(C).
    18. Li Chen & Di Wang & Ruyi Shi, 2022. "Can China’s Carbon Emissions Trading System Achieve the Synergistic Effect of Carbon Reduction and Pollution Control?," IJERPH, MDPI, vol. 19(15), pages 1-21, July.
    19. Li, Quan & Sun, Haodan & Tao, Yunqing & Ye, Yongwei & Zhan, Kaiyan, 2023. "The fault-tolerant and error-correction mechanism and capital allocation efficiency of state-owned Enterprises in China," Pacific-Basin Finance Journal, Elsevier, vol. 80(C).
    20. Li Meng & Ke Wang & Taoyong Su & He He, 2022. "Carbon Emission Trading and Corporate Financing: Evidence from China," Energies, MDPI, vol. 15(14), pages 1-13, July.

    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:15:y:2023:i:13:p:10147-:d:1179911. 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.