IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i1p466-d1313411.html
   My bibliography  Save this article

Does the Energy-Consumption Permit Trading Scheme Improve Carbon Emission Performance? Evidence from a Quasi-Natural Experiment in China

Author

Listed:
  • Qi He

    (School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China)

  • Hongli Jiang

    (School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China)

Abstract

The Chinese government launched the Energy-Consumption Permit Trading Scheme (ECPT) in 2016 as a pilot policy initiative to achieve energy conservation and emissions reduction goals. To generate a quasi-natural experiment, this study used a difference-in-differences (DID) approach with panel data from 2006 to 2020 in China. The goal was to explore the impact of the ECPT policy on the carbon emission performance (CEP) as well as analyze the underlying influence processes. The findings indicate that applying the ECPT has a considerable positive influence on the CEP. In comparison to provinces that did not engage in the pilot program, those that did reported a 4.5% improvement in CEP. We can safely declare that the results remain consistent and trustworthy after undergoing a battery of rigorous tests to assess the robustness of our findings. The mechanism’s evaluation revealed that the ECPT has the potential to improve the CEP, mostly via changing energy consumption patterns and stimulating technological innovation. Furthermore, when we considered heterogeneity, we discovered that factors such as geographical location, the level of green financing development, and the level of environmental regulation may affect the ECPT policy effects.

Suggested Citation

  • Qi He & Hongli Jiang, 2024. "Does the Energy-Consumption Permit Trading Scheme Improve Carbon Emission Performance? Evidence from a Quasi-Natural Experiment in China," Sustainability, MDPI, vol. 16(1), pages 1-27, January.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:1:p:466-:d:1313411
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/1/466/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/1/466/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fang, Guochang & Gao, Zhengye & Tian, Lixin & Fu, Min, 2022. "What drives urban carbon emission efficiency? – Spatial analysis based on nighttime light data," Applied Energy, Elsevier, vol. 312(C).
    2. Franzò, Simone & Frattini, Federico & Cagno, Enrico & Trianni, Andrea, 2019. "A multi-stakeholder analysis of the economic efficiency of industrial energy efficiency policies: Empirical evidence from ten years of the Italian White Certificate Scheme," Applied Energy, Elsevier, vol. 240(C), pages 424-435.
    3. Zhang, Yanfang & Gao, Qi & Wei, Jinpeng & Shi, Xunpeng & Zhou, Dequn, 2023. "Can China's energy-consumption permit trading scheme achieve the “Porter” effect? Evidence from an estimated DSGE model," Energy Policy, Elsevier, vol. 180(C).
    4. Ma, Guangcheng & Qin, Jiahong & Zhang, Yumeng, 2023. "Does the carbon emissions trading system reduce carbon emissions by promoting two-way FDI in developing countries? Evidence from Chinese listed companies and cities," Energy Economics, Elsevier, vol. 120(C).
    5. Yang, Zhenbing & Shao, Shuai & Xu, Lili & Yang, Lili, 2022. "Can regional development plans promote economic growth? City-level evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).
    6. Zhou, P. & Ang, B.W. & Poh, K.L., 2008. "A survey of data envelopment analysis in energy and environmental studies," European Journal of Operational Research, Elsevier, vol. 189(1), pages 1-18, August.
    7. Zhang, Yanfang & Guo, Siyuan & Shi, Xunpeng & Qian, Xiangyan & Nie, Rui, 2021. "A market instrument to achieve carbon neutrality: Is China’s energy-consumption permit trading scheme effective?," Applied Energy, Elsevier, vol. 299(C).
    8. Wang, Jiaqi & Tian, Jiaxin & Kang, Yuxin & Guo, Kun, 2023. "Can green finance development abate carbon emissions: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 73-91.
    9. Yi, Jinchao & Hou, Yilin & Zhang, Zach Ziye, 2023. "The impact of foreign direct investment (FDI) on China's manufacturing carbon emissions," Innovation and Green Development, Elsevier, vol. 2(4).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Yanfang & Wei, Jinpeng & Gao, Qi & Shi, Xunpeng & Zhou, Dequn, 2022. "Coordination between the energy-consumption permit trading scheme and carbon emissions trading: Evidence from China," Energy Economics, Elsevier, vol. 116(C).
    2. Zhang, Yanfang & Gao, Qi & Wei, Jinpeng & Shi, Xunpeng & Zhou, Dequn, 2023. "Can China's energy-consumption permit trading scheme achieve the “Porter” effect? Evidence from an estimated DSGE model," Energy Policy, Elsevier, vol. 180(C).
    3. Mengyao Liu & Hongli Jiang, 2022. "Can the Energy-Consumption Permit Trading Scheme Curb SO 2 Emissions? Evidence from a Quasi-Natural Experiment in China," Sustainability, MDPI, vol. 14(24), pages 1-20, December.
    4. Costa, Marcelo Azevedo & Lopes, Ana Lúcia Miranda & de Pinho Matos, Giordano Bruno Braz, 2015. "Statistical evaluation of Data Envelopment Analysis versus COLS Cobb–Douglas benchmarking models for the 2011 Brazilian tariff revision," Socio-Economic Planning Sciences, Elsevier, vol. 49(C), pages 47-60.
    5. Atris, Amani Mohammed & Goto, Mika, 2019. "Vertical structure and efficiency assessment of the US oil and gas companies," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    6. Zhi-Fu Mi & Yi-Ming Wei & Chen-Qi He & Hua-Nan Li & Xiao-Chen Yuan & Hua Liao, 2017. "Regional efforts to mitigate climate change in China: a multi-criteria assessment approach," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(1), pages 45-66, January.
    7. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "DEA environmental assessment of coal fired power plants: Methodological comparison between radial and non-radial models," Energy Economics, Elsevier, vol. 34(6), pages 1854-1863.
    8. Fethi, Meryem Duygun & Pasiouras, Fotios, 2010. "Assessing bank efficiency and performance with operational research and artificial intelligence techniques: A survey," European Journal of Operational Research, Elsevier, vol. 204(2), pages 189-198, July.
    9. Bai-Chen Xie & Jie Gao & Shuang Zhang & ZhongXiang Zhang, 2017. "What Factors Affect the Competiveness of Power Generation Sector in China? An Analysis Based on Game Cross-efficiency," Working Papers 2017.12, Fondazione Eni Enrico Mattei.
    10. Wenxuan Ma, 2022. "Exploring the Role of Educational Human Capital and Green Finance in Total-Factor Energy Efficiency in the Context of Sustainable Development," Sustainability, MDPI, vol. 15(1), pages 1-18, December.
    11. Jeanneaux, Philippe & Latruffe, Laure, 2016. "Modelling pollution-generating technologies in performance benchmarking: Recent developments, limits and future prospects in the nonparametric frameworkAuthor-Name: Dakpo, K. Hervé," European Journal of Operational Research, Elsevier, vol. 250(2), pages 347-359.
    12. Yanli Ji & Jie Xue & Kaiyang Zhong, 2022. "Does Environmental Regulation Promote Industrial Green Technology Progress? Empirical Evidence from China with a Heterogeneity Analysis," IJERPH, MDPI, vol. 19(1), pages 1-23, January.
    13. Du, Xiaoyun & Meng, Conghui & Guo, Zhenhua & Yan, Hang, 2023. "An improved approach for measuring the efficiency of low carbon city practice in China," Energy, Elsevier, vol. 268(C).
    14. Du, Limin & Hanley, Aoife & Wei, Chu, 2015. "Estimating the Marginal Abatement Cost Curve of CO2 Emissions in China: Provincial Panel Data Analysis," Energy Economics, Elsevier, vol. 48(C), pages 217-229.
    15. Muhammet Enis Bulak & Murat Kucukvar, 2022. "How ecoefficient is European food consumption? A frontier‐based multiregional input–output analysis," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 817-832, October.
    16. Arnaud Abad & Michell Arias & Paola Ravelojaona, 2023. "Environmental Productivity Assessment: an Illustration with the Ecuadorian Oil Industry," Post-Print hal-03574542, HAL.
    17. Suzuki, Soushi & Nijkamp, Peter, 2016. "An evaluation of energy-environment-economic efficiency for EU, APEC and ASEAN countries: Design of a Target-Oriented DFM model with fixed factors in Data Envelopment Analysis," Energy Policy, Elsevier, vol. 88(C), pages 100-112.
    18. Rongjiang Cai & Tao Lv & Cheng Wang & Nana Liu, 2023. "Can Environmental Information Disclosure Enhance Firm Value?—An Analysis Based on Textual Characteristics of Annual Reports," IJERPH, MDPI, vol. 20(5), pages 1-21, February.
    19. Xiao, Huijuan & Wang, Daoping & Qi, Yu & Shao, Shuai & Zhou, Ya & Shan, Yuli, 2021. "The governance-production nexus of eco-efficiency in Chinese resource-based cities: A two-stage network DEA approach," Energy Economics, Elsevier, vol. 101(C).
    20. Gómez-Calvet, Roberto & Conesa, David & Gómez-Calvet, Ana Rosa & Tortosa-Ausina, Emili, 2014. "Energy efficiency in the European Union: What can be learned from the joint application of directional distance functions and slacks-based measures?," Applied Energy, Elsevier, vol. 132(C), pages 137-154.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:1:p:466-:d:1313411. 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.