Year: 2024
Type: article
Abstract: High Resolution Image Download MS PowerPoint Slide Emission trading schemes (ETS) are increasingly becoming a popular policy instrument to balance carbon abatement and economic growth. As a globally unified carbon pricing system has not yet been established, whether regionally operated ETSs cause carbon leakage remains a major concern. Taking China’s regional pilot ETSs as a quasi-natural experiment, the study uses the spatial difference-in-differences method to examine how regional ETSs affect carbon emissions in and outside cities of policy implementation. Our analysis finds that China’s regional ETS policy contributes to a 6.1% reduction in urban CO 2 emissions and a 6.6% decline in emissions intensity in regulated cities, causing carbon leakages that increase CO 2 emissions in neighboring cities by 1.7% on average. Our finding further suggests that regional ETSs mitigate local CO 2 emissions through outsourcing production, improving energy efficiency and decarbonizing energy structure, whereas the outsourcing of industrial production drives up CO 2 emissions in adjacent cities. Moreover, the performances of regional ETSs vary largely by socioeconomic context and mechanism design. China’s regional ETSs reduce CO 2 emissions more effectively in central and industrial cities but with more severe carbon leakage, while rigorous compliance mechanisms and active market trading help deepen carbon abatement and alleviate carbon leakage.
Authors: Jingjing Jiang, Bin Ye, Zhenzhong Zeng, Xin Yang, Zhuoluo Sun, Shuai Shao, Kuishuang Feng, Xiujie Tan
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
SDG: Climate action
Open Access status: hybrid
Estimated APC paid: $4,500
Award: G1398154191
OpenAlex ID: W4401881981