Work

The Efficiency of China’s Carbon Trading Schemes: A Tale of Seven Pilot Markets

Year: 2024

Type: article

Abstract: This study evaluates the efficiency of China’s seven emission trading schemes (ETS) piloted in 2013. We evaluate seven pilots’ overall technical and scale efficiencies and temporal dynamics during 2014–2023. We use a bootstrap correction data envelopment analysis (bootstrap-DEA), which guarantees a more accurate efficiency estimation than the traditional DEA model. The results show that the average overall (pure technical) efficiency of the seven pilot markets increased from 0.612 (0.844) in 2014 to 0.898 (0.990) in 2023. Furthermore, we document that seven ETS pilots differ remarkably in efficiency and transaction price, whilst all have shortages. Specifically, the small-scale market transaction is the main constraint effect on the average scale efficiency of the ETS. This study provides concrete recommendations for policy makers to consummate institutional designs to improve ETS efficiency.

Source: Commodities

DOI: 10.3390/commodities3030020

Authors: Yigang Wei, Yan Li, Julien Chevallier, Michal Wojewodzki

Institutions: Beihang University, Shandong University, Université Paris 8, Lingnan University

Language: English

Topic: Efficiency Analysis Using DEA

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

SDG: Climate action

Open Access status: gold

Estimated APC paid: $1,137