IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v91y2026icp519-538.html

Peer effects under regional environmental regulation: Evidence from China’s regional emissions trading systems

Author

Listed:
  • Luo, Chongjia
  • Duan, Maosheng
  • Wang, Baixue

Abstract

This study discussed whether and how peer effects can amplify the effectiveness of regional environmental regulation. Using China’s regional emissions trading systems (ETSs) as a quasi-natural experiment and a unique firm-level dataset, we mapped firms’ geographic and industrial linkages to identify the impacts of ETSs on carbon emissions of both regulated firms and their neighboring peers. The results revealed that China’s regional ETS policies resulted in a 14.7% emission reduction among regulated firms and an 8.0% emission reduction among their neighboring peers, with stronger effects observed in peers with greater geographic and industrial proximity. Peer effects doubled the regulatory effectiveness on carbon abatement. The mechanism analyses showed that these peer effects are primarily driven by informational externalities, particularly through the spread of mitigation measures and regulatory information from regulated firms. Additionally, our findings indicated the presence of broader spillover effects, comprising green innovation spillovers to industry peers and carbon abatement spillovers to value-chain partners. This study highlighted the critical role of peer effects in achieving environmental benefits.

Suggested Citation

  • Luo, Chongjia & Duan, Maosheng & Wang, Baixue, 2026. "Peer effects under regional environmental regulation: Evidence from China’s regional emissions trading systems," Economic Analysis and Policy, Elsevier, vol. 91(C), pages 519-538.
    • Handle: RePEc:eee:ecanpo:v:91:y:2026:i:c:p:519-538
    DOI: 10.1016/j.eap.2026.03.031
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592626001311
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2026.03.031?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:eee:ecanpo:v:91:y:2026:i:c:p:519-538. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    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.