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Impacts of the emissions trading system on high-quality energy development: Spatial spillovers with green gravity weights

Author

Listed:
  • Zhu, Chenhao
  • Tang, Baojun
  • Wang, Chongzhou
  • Wu, Yun
  • Xie, Pengzhen
  • Ji, Chang-Jing

Abstract

Promoting High-quality Energy Development (HED) is a critical strategy in addressing climate change. While carbon emissions trading system (ETS) optimizes energy structure and enhances energy efficiency, it also introduces challenges related to energy equity and supply security, hindering the realization of HED and the coordination of provincial policy efforts. Using panel data from 31 provinces during 2009–2021, this study first evaluates HED performance through a multidimensional indicator system and measures green policy intensity via Bayesian factor analysis. Subsequently, it applies a spatial econometric model incorporating a novel green gravity matrix to empirically examine the impact and mechanism of ETS on HED, followed by an exploration of regional heterogeneity and spatial spillover boundaries. Results show that ETS effectively fosters HED by advancing green technologies and expanding green financing. Eastern provinces exhibit higher HED levels and stronger policy intensity, while the most pronounced positive spillover effects occur in central regions. Conversely, western and pollution-intensive provinces experience negative local impacts due to higher compliance costs. Moreover, spillovers under the green gravity matrix are weaker than those based on geographic matrix, suggesting that current policy support is excessively concentrated in developed areas. ETS spillover effects are strongest within an 800–1000 km radius. Policy recommendations include establishing interprovincial carbon market linkages, promoting the mobility of green technologies and finance toward underperforming regions, and adopting differentiated policy incentives for central and western provinces to support their HED.

Suggested Citation

  • Zhu, Chenhao & Tang, Baojun & Wang, Chongzhou & Wu, Yun & Xie, Pengzhen & Ji, Chang-Jing, 2026. "Impacts of the emissions trading system on high-quality energy development: Spatial spillovers with green gravity weights," Structural Change and Economic Dynamics, Elsevier, vol. 79(C), pages 429-440.
    • Handle: RePEc:eee:streco:v:79:y:2026:i:c:p:429-440
    DOI: 10.1016/j.strueco.2026.06.001
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