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Can the Carbon Emissions Trading Pilot Policy Improve the Ecological Well-Being Performance of Cities in China?

Author

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  • Jianfeng Guo

    (School of Economics and Management, Xi’an University of Posts & Telecommunications, Xi’an 710061, China)

  • Xiaotong Ou

    (School of Economics and Management, Xi’an University of Posts & Telecommunications, Xi’an 710061, China)

  • Yan Li

    (School of Economics and Management, Xi’an University of Posts & Telecommunications, Xi’an 710061, China)

  • Kecheng Liu

    (Henley Business School, University of Reading, Reading RG6 6UR, UK)

Abstract

Adhering to ecological priorities and promoting environmental regulations is essential for improving ecological well-being performance (EWP); conversely, EWP is a crucial measure of social and economic sustainability. From the perspective of high-quality development, we see China’s cities’ adoption of the carbon emissions trading pilot (CETP) policy as a quasi-natural experiment, and we use the difference-in-differences (DID) approach to analyze how market-based carbon credits affect the urban EWP and its action mechanism. The findings of the empirical study show that: (1) The implementation of CETP can effectively improve the quality of urban development, with an increase of 29.1% in the EWP value, effectively contributing to the realization of the goal of high-quality development; (2) the urban EWP levels in China are higher in the east, lower in the west and lowest in the middle, but they all show a fluctuating upward trend; (3) according to the heterogeneity study, the implementation of CETP has a scale effect and significant urban locational differences, and its impact on EWP of cities is greater in “advanced cities” and central region cities; (4) the implementation of CETP can advance industrial structure upgrading, thereby promoting the EWP level, but the mediating effect of technological innovation is not significant. The possible innovations in this paper are as follows: (1) It broadens the existing research system on the effectiveness of CETP policies. (2) It reconstructs the index system of EWP from the perspective of high-quality development so that its measurement results can reflect the quality of urban development more comprehensively. (3) The research samples of CETP and EWP are enriched by using prefectural-level data.

Suggested Citation

  • Jianfeng Guo & Xiaotong Ou & Yan Li & Kecheng Liu, 2024. "Can the Carbon Emissions Trading Pilot Policy Improve the Ecological Well-Being Performance of Cities in China?," Sustainability, MDPI, vol. 16(2), pages 1-19, January.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:2:p:841-:d:1321779
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    References listed on IDEAS

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