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How does the energy-consuming rights trading policy affect China's carbon emission intensity?

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  • Wang, Kaike
  • Su, Xuewei
  • Wang, Shuhong

Abstract

Developing a low-carbon economy requires reducing not only CO2 emissions but also the emission intensity. Analyzing carbon emission intensity can provide a better understanding of emission reduction efficiency and the resulting economic outcomes. Moreover, energy use adjustment is essential to achieve carbon reduction. By improving energy efficiency and structure, China's Energy-Consuming Rights Trading (ECRT) policy may reduce CO2 emission intensity. Further, it may motivate businesses to invest in new technologies and increase productivity to obtain economic dividends. We adopt the difference-in-differences (DID) method to explore the effect of the ECRT strategy on carbon emission intensity. The study demonstrates that the policy dramatically reduces the intensity of regional carbon emissions. Carbon intensity can be reduced in two ways: decreasing the scale of CO2 emissions and increasing economic profits. Further, the ECRT strategy may have a large positive impact on regional green technology innovation and produce the Porter effect. We also find regional heterogeneity in the effects of the ECRT policy. Our study not only enriches knowledge on the effects of the ECRT policy but also may aid relevant departments to enhance the ECRT system further.

Suggested Citation

  • Wang, Kaike & Su, Xuewei & Wang, Shuhong, 2023. "How does the energy-consuming rights trading policy affect China's carbon emission intensity?," Energy, Elsevier, vol. 276(C).
    • Handle: RePEc:eee:energy:v:276:y:2023:i:c:s0360544223009738
    DOI: 10.1016/j.energy.2023.127579
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