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Mechanism of Carbon Finance’s Influence on Radical Low-Carbon Innovation with Evidence from China

Author

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  • Limei Sun

    (School of Economics and Management, Harbin Engineering University, Harbin 150001, China)

  • Jinyu Wang

    (School of Economics and Management, Harbin Engineering University, Harbin 150001, China)

  • Zhicheng Wang

    (Education Foundation, Renmin University of China, Beijing 100086, China)

  • Leorey Marquez

    (Data61, CSIRO, Clayton, Victoria 3168, Australia)

Abstract

Radical low-carbon innovations have considerable technological and revolutionary influences. These key technologies considerably reduce carbon dioxide emissions. This study examines the role of carbon finance development in China’s radical low-carbon innovations. The paper identifies the key entities involved, constructs a network model of the interaction between carbon finance and radical low-carbon innovation, and uses multi-agent simulation modeling to analyze the associated influence mechanism. The results demonstrate that the carbon market can promote radical low-carbon innovation by (1) regulating the number of enterprises participating subject to carbon emission regulations, (2) regulating the number of market intermediaries, (3) establishing the market regulation level, and (4) setting the carbon intensity reduction level. The paper concludes that the Chinese government can formulate novel carbon market-related policies and regulations that, in a timely manner, influence the relationship between the carbon market and participating entities to promote the development of radical low-carbon technologies.

Suggested Citation

  • Limei Sun & Jinyu Wang & Zhicheng Wang & Leorey Marquez, 2020. "Mechanism of Carbon Finance’s Influence on Radical Low-Carbon Innovation with Evidence from China," Sustainability, MDPI, vol. 12(18), pages 1-14, September.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:18:p:7708-:d:415382
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    References listed on IDEAS

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    1. Yuguo Jiang & Enock Mintah Ampaw & Feifei Xu, 2023. "Unpacking the Mechanisms of Network Embeddedness for Low-Carbon Innovation in Chinese Enterprises: A Dynamic and Cognitive Theory Perspective," Sustainability, MDPI, vol. 15(15), pages 1-17, July.

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