Study on the effect of carbon trading regulation on green innovation and heterogeneity analysis from China

Ming Liu, Yanfei Shan and Yemei Li

Energy Policy, 2022, vol. 171, issue C

Abstract: China launched seven pilot areas for climate change mitigation before establishing a unified carbon emissions trading system in 2014. To explore the heterogeneous effect of carbon trading regulation on green innovation in China, we constructed evolutionary games with players of governments and enterprises. We then conducted empirical studies with the difference-in-difference model. With the data of listed Chinese A-share companies from 2008 to 2018, we found that implementing carbon trading pilot projects in China significantly increases the green innovation output of enterprises in the pilot regions. Additionally, the sensitivity to carbon trading policies varies across industries and property rights. Regarding the quality of green innovation triggered by the pilot project, firms in the pilot regions prefer high-quality green invention patent innovations over low-quality green utility model patent innovations. In addition, state-owned enterprises tend to apply for high-quality green invention patents, while firms in high-pollution industries prefer to apply for lower-quality green utility model patents. Finally, we put forward policy suggestions. First, China should accelerate the pilot carbon trading regulation and expand its scope. Second, there should be regional and industrial differences in constricting carbon trading regulations. Third, the government should avoid unreasonable regulatory intensity design.

Keywords: Carbon trading regulation; Green innovation; Heterogeneity analysis (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:171:y:2022:i:c:s0301421522005092

DOI: 10.1016/j.enpol.2022.113290

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