Work

Analyzing the Effectiveness of Carbon Pricing Instruments in Reducing Carbon Emissions in Major Asian Economies

Year: 2024

Type: article

Abstract: Carbon Pricing Instruments (CPIs), such as Carbon Taxes and Emission Trading Schemes (ETSs), have been launched in several countries, primarily in Europe and North America, as a means of limiting the emissions of greenhouse gases (GHGs) which have been known to cause climate change. The adoption of these measures in Asia has been controversial, with many arguing that they would limit economic development in the region. We review the CPIs of 18 Asian economies, 7 of which have adopted a CPI during our review period from 1990 to 2021. We perform a comparative analysis of the economies in Asia, applying the Kaya Identity to decompose the variables affecting carbon emissions and the Nearest Neighbor Matching technique to compare the effect that CPIs have on countries adopting these policies relative to other jurisdictions. We found a positive and significant effect of CPIs on reducing carbon emissions in the Asian countries compared in our study. This offers crucial insights for policymakers, stressing the effectiveness of CPIs in balancing environmental sustainability with economic development in the region.

Source: Sustainability

DOI: 10.3390/su162310542

Authors: Aaron Finley, Wei He, Hui Huang, Chitin Hon

Institutions: Macau University of Science and Technology, Hong Kong Polytechnic University

Language: English

Topic: Climate Change Policy and Economics

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Climate action

Open Access status: gold

Estimated APC paid: $2,728