Sustainable Feasibility of Carbon Trading Policy on Heterogenetic Economic and Industrial Development

Haoran Zhang, Rongxia Zhang, Guomin Li, Wei Li and Yongrok Choi
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Haoran Zhang: School of Economics and Management, Taiyuan University of Technology; Taiyuan 030024, China
Rongxia Zhang: School of Economics and Management, Taiyuan University of Technology; Taiyuan 030024, China
Guomin Li: School of Economics and Management, Taiyuan University of Technology; Taiyuan 030024, China
Wei Li: School of Economics and Management, Taiyuan University of Technology; Taiyuan 030024, China
Yongrok Choi: Department of International Trade, Inha University, Incheon 402-751, Korea

Sustainability, 2019, vol. 11, issue 23, 1-18

Abstract: A carbon emission trading system (ETS) is an effective market mechanism for promoting the reduction of global greenhouse gas emissions and achieving sustainable development between the economy and the environment. To analyze the emissions reduction effect and economic effect of China’s ETS and further discuss the mechanisms of economic development differences and industrial development differences on the final effect of the policy, this study adopts the propensity score matching-difference in differences method and triple difference method. The empirical results show the following: (1) The ETS can simultaneously achieve both the emissions reduction effect and economic effect when key control variables are included. (2) The population, carbon emissions intensity and per capita GDP have significant positive impacts on carbon emissions; the environmental pollution control intensity, research structure, and research intensity have negative impacts on carbon emissions; and the capita stock, employment, and energy consumption have significant positive economic effects. (3) The ETS has a stronger inhibitory effect on the provinces with higher levels of economic and service development compared to the provinces with lower levels of economic and service development. In contrast, the policy has a weaker inhibitory effect on provinces with higher levels of industrial and construction development compared with the lower level provinces.

Keywords: heterogeneity; Porter effect; PSM-DID; DDD (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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