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Synergy between emissions trading system and low-carbon consumption awareness: A multi-agent simulation analysis

Author

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  • Duan, Mengmeng
  • Wang, Mei
  • Zhou, Xianyang
  • Zhou, Dequn
  • Wu, Fei

Abstract

During the low-carbon transition, industrial enterprises face dual pressures from emissions trading system (ETS) compliance and growing consumer demand for sustainable products. While the individual roles of ETS and consumer low-carbon awareness in reducing CO2 emissions have been well documented, their combined effects remain uncertain, particularly when accounting for heterogeneous firms under regulation and endogenously determined carbon pricing mechanisms. To address this gap, this study constructs a multi-agent model to investigate the joint impact of ETS and consumer low-carbon awareness on emissions, while also elucidating their interaction mechanisms. Drawing on sectoral data from China's seven key industries, this study demonstrates that the coexistence of an ETS and consumer low-carbon awareness accelerates initial-phase decarbonization, primarily by creating first-mover advantages for clean technology adoption. Furthermore, consumer-driven demand for sustainable products not only counterbalances ETS-induced output contraction and price fluctuations but also raises the share of low-carbon value-added revenue by 4–9 % sector-wide.

Suggested Citation

  • Duan, Mengmeng & Wang, Mei & Zhou, Xianyang & Zhou, Dequn & Wu, Fei, 2025. "Synergy between emissions trading system and low-carbon consumption awareness: A multi-agent simulation analysis," Energy Economics, Elsevier, vol. 151(C).
    • Handle: RePEc:eee:eneeco:v:151:y:2025:i:c:s0140988325008047
    DOI: 10.1016/j.eneco.2025.108974
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