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The Impact of Carbon Trading Pilot Policy on Carbon Neutrality: Empirical Evidence from Chinese Cities

Author

Listed:
  • Ke Zhang

    (School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China)

  • Jing Qian

    (School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China)

  • Zhenhua Zhang

    (Institute of Green Finance, Lanzhou University, Lanzhou 730000, China)

  • Shijiao Fang

    (School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China)

Abstract

As one of a number of crucial policies for achieving the goal of “double carbon”, it is crucial to investigate the “carbon neutral” effect of the carbon trading market (CTM) in the pilot phase, which is an essential reference for the development of a future CTM. Based on panel data of 283 cities in China in the period from 2006 to 2017, this paper examines the impact of the Carbon Trading Pilot Policy (CTPP) on the achievement of the “carbon neutrality” target. The study shows that the CTPP market can promote an increase in regional net carbon sinks and further accelerate the achievement of the “carbon neutrality” goal. The findings of the study remain valid after a series of robustness tests. The mechanism analysis finds that the CTPP can help achieve the carbon neutrality target through three mechanisms: the effect on concern for the environment, the effect on urban governance, and the effect on energy production and consumption. Further analysis reveals that enterprises’ willingness and productive behavior, as well as the internal elements of the market, have a positive moderating effect on the achievement of the carbon neutrality target. In addition, there is heterogeneity among regions with different technological endowments, CTPP regions, and regions with different shares of state-owned assets in the CTM. This paper provides important practical references and empirical evidence that can help China to better achieve the “carbon neutrality” target.

Suggested Citation

  • Ke Zhang & Jing Qian & Zhenhua Zhang & Shijiao Fang, 2023. "The Impact of Carbon Trading Pilot Policy on Carbon Neutrality: Empirical Evidence from Chinese Cities," IJERPH, MDPI, vol. 20(5), pages 1-23, March.
    • Handle: RePEc:gam:jijerp:v:20:y:2023:i:5:p:4537-:d:1087194
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    References listed on IDEAS

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    1. Thomas Daniels, 2010. "Integrating Forest Carbon Sequestration Into a Cap-and-Trade Program to Reduce Net CO Emissions," Journal of the American Planning Association, Taylor & Francis Journals, vol. 76(4), pages 463-475.
    2. Junmin Wei & Manhong Shen, 2022. "Analysis of the Efficiency of Forest Carbon Sinks and Its Influencing Factors—Evidence from China," Sustainability, MDPI, vol. 14(18), pages 1-17, September.
    3. Zhenhua Zhang & Jingxue Zhang & Yanchao Feng, 2021. "Assessment of the Carbon Emission Reduction Effect of the Air Pollution Prevention and Control Action Plan in China," IJERPH, MDPI, vol. 18(24), pages 1-13, December.
    4. Zhenhua Zhang & Guoxing Zhang & Shunfeng Song & Bin Su, 2020. "Spatial Heterogeneity Influences of Environmental Control and Informal Regulation on Air Pollutant Emissions in China," IJERPH, MDPI, vol. 17(13), pages 1-22, July.
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    Cited by:

    1. Wai Ming To & Andy W. L. Chung, 2023. "Carbon-Neutrality Research in China—Trends and Emerging Themes," World, MDPI, vol. 4(3), pages 1-19, August.
    2. Kong, Jiangwei & Gao, Mengxi, 2024. "Carbon trading mechanism and industrial pollution behavior: A study based on regression discontinuity design analysis," Finance Research Letters, Elsevier, vol. 69(PA).

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