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Can the Carbon Trading Policy Enhance Resource Allocation Efficiency?—An Analysis of the Synergistic Effect of Market Mechanism and Government Intervention

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  • Yunqing Zhao

    (School of Management, Shanghai University, Shanghai 200444, China)

  • Debao Dai

    (School of Management, Shanghai University, Shanghai 200444, China)

  • Wei Shao

    (Scientific Research Management Department, Shanghai University, Shanghai 200444, China)

  • Liang Ye

    (Office of Admissions and Career Services, Shanghai University, Shanghai 200444, China)

Abstract

The carbon trading pilot policy is a key policy to achieve low-carbon development through market mechanism. Studying the impact of carbon trading on resource allocation efficiency can provide an important empirical basis to achieve energy saving and green development. This paper delves into the influence of carbon trading on resource allocation efficiency by utilizing the multiperiod difference-in-differences based on comprehensive provincial data spanning from 2011 to 2020 in China. The findings show that carbon trading can promote the optimization of capital allocation efficiency but negatively affect the labor allocation efficiency in the pilot areas. This conclusion still holds through various robustness tests. Further research on regional heterogeneity shows that there are significant differences in the impact of resource allocation efficiency and labor allocation efficiency between eastern and western regions. Crucially, the limited scope of the carbon market’s direct influence on labor allocation efficiency is highlighted, demonstrating the need for government intervention to amplify its optimization effects based on the synergistic effect. It provides vital empirical insights for China’s ongoing pursuit of energy-saving and green development strategies, emphasizing the synergies between market mechanisms and government regulation in fostering sustainable economic transformation.

Suggested Citation

  • Yunqing Zhao & Debao Dai & Wei Shao & Liang Ye, 2024. "Can the Carbon Trading Policy Enhance Resource Allocation Efficiency?—An Analysis of the Synergistic Effect of Market Mechanism and Government Intervention," Sustainability, MDPI, vol. 16(22), pages 1-24, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:22:p:10128-:d:1525188
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    Cited by:

    1. Xin Zhang & Yingming Zhu, 2025. "Did Carbon Emission Trade Improve Resource Misallocation? Evidence from China," Sustainability, MDPI, vol. 17(6), pages 1-16, March.

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