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Study on the U-shaped relationship of carbon constraint on the large thermal power plants’ profitability

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  • Shaomei Yang

    (North China Electric Power University)

  • Xiaotong Zhang

    (North China Electric Power University)

Abstract

With the contradiction between resources and environment in China is becoming more and more serious, China has taken energy saving and emission reduction as a national strategic planning policy. Enterprise, as an important participant in the social and economic development, is an important main body of the implementation of energy-saving and emission-reduction strategy, especially traditional high-polluting thermal power enterprises. Research on the influence of low-carbon constraint on profitability from the angle of enterprises is necessary. From the view of the core factor of the enterprise profitability, and with the help of MATLAB and least squares polynomial fitting method, a theoretical model is established to analyze the relationship between low-carbon constraint and corporate profitability. Both theoretical analysis and empirical results show that there is a U-shaped relationship between carbon constraints and the profitability of large thermal power enterprises. Namely, in the early stage, because of the cost of R and D, the profitability of the enterprise has declined. Once this input becomes the heterogeneous resource that difficult to replace, profitability will increase with the decrease of carbon emissions.

Suggested Citation

  • Shaomei Yang & Xiaotong Zhang, 2017. "Study on the U-shaped relationship of carbon constraint on the large thermal power plants’ profitability," 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. 89(3), pages 1421-1435, December.
    • Handle: RePEc:spr:nathaz:v:89:y:2017:i:3:d:10.1007_s11069-017-3028-7
    DOI: 10.1007/s11069-017-3028-7
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    References listed on IDEAS

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