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Examining the economic effects of emissions trading scheme in China

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  • Jiekuan Zhang
  • Yan Zhang

Abstract

This paper examined the economic impacts of China’s emissions trading system (ETS), implemented in 2013, in terms of gross domestic product (GDP) and per capita GDP. The methodology drew on a difference-in-differences (DID) method using dynamic panel data for 30 provincial regions. The estimation results show that implementing an ETS policy has statistically significant negative effects on economic growth. When considering the additional control variables, these effects are still statistically significant. Furthermore, these negative impacts increase over time with respect to both GDP and per capita GDP. The counterfactual tests confirm the robustness of our DID estimation results. The specific influence mechanism of China’s ETS policy was finally discussed. Our findings provide a quantitative decision-making support for popularizing ETS policy in China. Based on our DID model, empirical investigations of the ETS policy, especially concerning economic growth in other regions would produce prolific contributions to the literature.

Suggested Citation

  • Jiekuan Zhang & Yan Zhang, 2021. "Examining the economic effects of emissions trading scheme in China," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 64(9), pages 1622-1641, July.
    • Handle: RePEc:taf:jenpmg:v:64:y:2021:i:9:p:1622-1641
    DOI: 10.1080/09640568.2020.1835620
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    Cited by:

    1. Wensheng Xiao & Haojia Kong & Lifan Shi & Valentina Boamah & Decai Tang, 2022. "The Impact of Innovation-Driven Strategy on High-Quality Economic Development: Evidence from China," Sustainability, MDPI, vol. 14(7), pages 1-20, April.
    2. Jia, Zhijie, 2023. "The hidden benefit: Emission trading scheme and business performance of downstream enterprises," Energy Economics, Elsevier, vol. 117(C).
    3. Yan Xiao & Yan Zhang & Jiekuan Zhang, 2023. "The Impact of Carbon Emission Trading on Industrial Green Total Factor Productivity," Sustainability, MDPI, vol. 15(7), pages 1-18, April.

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