IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i7p2832-d1365888.html
   My bibliography  Save this article

The Impact of Carbon Emissions Trading on the Total Factor Productivity of China’s Electric Power Enterprises—An Empirical Analysis Based on the Differences-in-Differences Model

Author

Listed:
  • Gezi Chen

    (Business School, Central South University, No. 932 Lushan South Road, Yuelu District, Changsha 410083, China)

  • Zhenhua Hu

    (Business School, Central South University, No. 932 Lushan South Road, Yuelu District, Changsha 410083, China)

  • Shijin Xiang

    (Humanities School, Central South University, No. 932 Lushan South Road, Yuelu District, Changsha 410083, China)

  • Ailan Xu

    (Finance Department, Central South University, No. 932 Lushan South Road, Yuelu District, Changsha 410083, China)

Abstract

Based on the panel data of China’s listed electric power enterprises, this paper adopts the differences-in-differences model to empirically analyze the pilot policy of carbon emissions trading’s impact on the total factor productivity of power enterprises in 2013. The study finds that the carbon trading pilot policy has a significant positive effect on the total factor productivity of power companies, and the two possible impact mechanisms are external cost compensation and additional income, and internal low-carbon technology innovation and resource allocation optimization. The conclusions above have been further confirmed by the parallel trend test and robustness test. The heterogeneity analysis demonstrates that there are differences in the regression results between state-owned enterprises and nonstate-owned enterprises. The possible reason is that state-owned enterprises are more likely to be affected by the carbon emissions trading system, and their asset-heavy model puts greater pressure on carbon emission reduction. Therefore, their demand for low-carbon technology innovation is more urgent; areas with stricter carbon emission verification are more sensitive to the implementation of carbon trading, and a reasonable increase in carbon verification can make the carbon trading market more effective. Based on the research results, this paper proposes to speed up the improvement of the national carbon trading market system, enhance the diversity and richness of the main market, improve the liquidity of the carbon trading market, broaden financing channels for electric power enterprises, and improve the carbon market supervision mechanism.

Suggested Citation

  • Gezi Chen & Zhenhua Hu & Shijin Xiang & Ailan Xu, 2024. "The Impact of Carbon Emissions Trading on the Total Factor Productivity of China’s Electric Power Enterprises—An Empirical Analysis Based on the Differences-in-Differences Model," Sustainability, MDPI, vol. 16(7), pages 1-17, March.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:7:p:2832-:d:1365888
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/7/2832/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/7/2832/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rubashkina, Yana & Galeotti, Marzio & Verdolini, Elena, 2015. "Environmental regulation and competitiveness: Empirical evidence on the Porter Hypothesis from European manufacturing sectors," Energy Policy, Elsevier, vol. 83(C), pages 288-300.
    2. Springer, Cecilia & Evans, Sam & Lin, Jiang & Roland-Holst, David, 2019. "Low carbon growth in China: The role of emissions trading in a transitioning economy," Applied Energy, Elsevier, vol. 235(C), pages 1118-1125.
    3. Shahiduzzaman, Md & Layton, Allan, 2017. "Decomposition analysis for assessing the United States 2025 emissions target: How big is the challenge?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 372-383.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haoran Zhang & Rongxia Zhang & Guomin Li & Wei Li & Yongrok Choi, 2020. "Has China’s Emission Trading System Achieved the Development of a Low-Carbon Economy in High-Emission Industrial Subsectors?," Sustainability, MDPI, vol. 12(13), pages 1-20, July.
    2. Liu, Duan & Yu, Nizhou & Wan, Hong, 2022. "Does water rights trading affect corporate investment? The role of resource allocation and risk mitigation channels," Economic Modelling, Elsevier, vol. 117(C).
    3. Djula Borozan, 2023. "Institutions and Environmentally Adjusted Efficiency," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 4489-4510, December.
    4. Brown, Marilyn A. & Li, Yufei & Soni, Anmol, 2020. "Are all jobs created equal? Regional employment impacts of a U.S. carbon tax," Applied Energy, Elsevier, vol. 262(C).
    5. Guo, Shu & Zhang, ZhongXiang, 2023. "Green credit policy and total factor productivity: Evidence from Chinese listed companies," Energy Economics, Elsevier, vol. 128(C).
    6. Zhangsheng Liu & Liuqingqing Yang & Liqin Fan, 2021. "Induced Effect of Environmental Regulation on Green Innovation: Evidence from the Increasing-Block Pricing Scheme," IJERPH, MDPI, vol. 18(5), pages 1-15, March.
    7. Badunenko, Oleg & Galeotti, Marzio & Hunt, Lester C., 2021. "Better to grow or better to improve? Measuring environmental efficiency in OECD countries with a Stochastic Environmental Kuznets Frontier," FEEM Working Papers 316226, Fondazione Eni Enrico Mattei (FEEM).
    8. Ren, Shenggang & Hu, Yucai & Zheng, Jingjing & Wang, Yangjie, 2020. "Emissions trading and firm innovation: Evidence from a natural experiment in China," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    9. Jintao Zhang & Zhen Yang & Li Meng & Lu Han, 2022. "Environmental regulations and enterprises innovation performance: the role of R&D investments and political connections," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 4088-4109, March.
    10. Nelson, Kelly P. & Parton, Lee C. & Brown, Zachary S., 2022. "Biofuels policy and innovation impacts: Evidence from biofuels and agricultural patent indicators," Energy Policy, Elsevier, vol. 162(C).
    11. Wang, Chao & Zhang, Yue-Jun, 2022. "The effect of environmental regulation and skill premium on the inflow of FDI:Evidence from Chinese industrial sectors," International Review of Economics & Finance, Elsevier, vol. 81(C), pages 227-242.
    12. Yanli Ji & Jie Xue & Kaiyang Zhong, 2022. "Does Environmental Regulation Promote Industrial Green Technology Progress? Empirical Evidence from China with a Heterogeneity Analysis," IJERPH, MDPI, vol. 19(1), pages 1-23, January.
    13. Qian Wang & Zhuoya Du & Boyu Wang & Yung‐ho Chiu & Tzu‐Han Chang, 2022. "Environmental regulation and foreign direct investment attractiveness: Evidence from China provinces," Review of Development Economics, Wiley Blackwell, vol. 26(2), pages 899-917, May.
    14. Ang, B.W. & Goh, Tian, 2019. "Index decomposition analysis for comparing emission scenarios: Applications and challenges," Energy Economics, Elsevier, vol. 83(C), pages 74-87.
    15. Guorong Chen & Changyan Liu, 2023. "Can Low–Carbon City Development Stimulate Population Growth? Insights from China’s Low–Carbon Pilot Program," Sustainability, MDPI, vol. 15(20), pages 1-22, October.
    16. Suyu Huang & Hanlian Lin & Yongjunbei Zhou & Haonan Ji & Naiping Zhu, 2022. "The Influence of the Policy of Replacing Environmental Protection Fees with Taxes on Enterprise Green Innovation—Evidence from China’s Heavily Polluting Industries," Sustainability, MDPI, vol. 14(11), pages 1-23, June.
    17. He, Yiqing & Ding, Xin & Yang, Chuchu, 2021. "Do environmental regulations and financial constraints stimulate corporate technological innovation? Evidence from China," Journal of Asian Economics, Elsevier, vol. 72(C).
    18. Huan Zhang, 2016. "Exploring the impact of environmental regulation on economic growth, energy use, and CO2 emissions nexus in China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 84(1), pages 213-231, October.
    19. Lee, Boreum & Park, Junhyung & Lee, Hyunjun & Byun, Manhee & Yoon, Chang Won & Lim, Hankwon, 2019. "Assessment of the economic potential: COx-free hydrogen production from renewables via ammonia decomposition for small-sized H2 refueling stations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 113(C), pages 1-1.
    20. Zhang, Yijun & Li, Xiaoping & Song, Yi & Jiang, Feitao, 2021. "Can green industrial policy improve total factor productivity? Firm-level evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 51-62.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:7:p:2832-:d:1365888. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.