“Carbon” suppresses “energy” - How does carbon emission right trading policy alleviate the energy trilemma?

Guidong Zhang, Jianlong Wang and Yong Liu

Energy, 2024, vol. 307, issue C

Abstract: Against the backdrop of addressing the dual challenges of tightening energy constraints and carbon emission reduction, this paper, building upon the construction of an urban-level Energy Trilemma Index, employs a Difference-in-Differences (DID) model to assess the impact of carbon emission right trading policy (CERTP) on the energy trilemma (ET). Key findings include: Firstly, compared to non-pilot areas, the ET in CERTP pilot areas decreased by 1.86 %; the policy's impact persists and is even greater in the long term, reaching 2.84 %. Secondly, CERTP stimulates green technological innovation, improves energy consumption structures, and alleviates ET levels. Furthermore, the study shows that CERTP, as a market-driven energy-environmental strategy, is further enhanced by the regulatory effects of marketization and government intervention. Lastly, the policy's impact is more pronounced in eastern China, resource-based cities, regions with stringent environmental regulations, and areas with high carbon prices. Based on these findings, the paper proposes a series of policy insights, not only aiding in understanding the causal relationship between CERTP and ET but also providing valuable references for designing carbon trading mechanisms to address ET. Importantly, the conclusions offer beneficial guidance for China's energy structure optimization, ensuring energy security and sustainable development goals.

Keywords: Carbon emission right trading policy; Energy trilemma; Environmental regulation; Government intervention; Difference-in-differences model (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:307:y:2024:i:c:s0360544224025647

DOI: 10.1016/j.energy.2024.132790

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