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Can the Energy-Consumption Permit Trading Scheme Curb SO 2 Emissions? Evidence from a Quasi-Natural Experiment in China

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  • Mengyao Liu

    (School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China)

  • Hongli Jiang

    (School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China)

Abstract

Energy and environmental pollution are major global challenges. This paper aims to examine the impact of China’s energy-consumption permit trading scheme (ECPT) on environmental pollution and the influence mechanisms. The study constructs provincial panel data for China from 2006 to 2020 and uses the difference-in-difference (DID) method to investigate the issue. Our results demonstrate that ECPT significantly curbs SO 2 emissions, as confirmed by a series of statistical robustness tests. Specifically, the ECPT has significantly reduced SO 2 by approximately 30.4%. Furthermore, the ECPT reduces SO 2 emissions mainly by optimizing the structure of energy consumption and promoting technological innovation. In addition, the impact of the ECPT on SO 2 emissions is more pronounced in the central and western provinces of China, and in provinces with lower levels of industrial structure and high environmental regulation intensity. This study provides a perspective from a developing country and makes an important contribution to the existing research by exploring the curbing effect of energy policy on SO 2 emissions.

Suggested Citation

  • Mengyao Liu & Hongli Jiang, 2022. "Can the Energy-Consumption Permit Trading Scheme Curb SO 2 Emissions? Evidence from a Quasi-Natural Experiment in China," Sustainability, MDPI, vol. 14(24), pages 1-20, December.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:24:p:16935-:d:1006312
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