Can the Energy-Consumption Permit Trading Scheme Curb SO 2 Emissions? Evidence from a Quasi-Natural Experiment in China

Mengyao Liu and Hongli Jiang ()
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Mengyao Liu: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China
Hongli Jiang: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China

Sustainability, 2022, vol. 14, issue 24, 1-20

Abstract: Energy and environmental pollution are major global challenges. This paper aims to examine the impact of China’s energy-consumption permit trading scheme (ECPT) on environmental pollution and the influence mechanisms. The study constructs provincial panel data for China from 2006 to 2020 and uses the difference-in-difference (DID) method to investigate the issue. Our results demonstrate that ECPT significantly curbs SO 2 emissions, as confirmed by a series of statistical robustness tests. Specifically, the ECPT has significantly reduced SO 2 by approximately 30.4%. Furthermore, the ECPT reduces SO 2 emissions mainly by optimizing the structure of energy consumption and promoting technological innovation. In addition, the impact of the ECPT on SO 2 emissions is more pronounced in the central and western provinces of China, and in provinces with lower levels of industrial structure and high environmental regulation intensity. This study provides a perspective from a developing country and makes an important contribution to the existing research by exploring the curbing effect of energy policy on SO 2 emissions.

Keywords: energy-consumption permit trading scheme (ECPT); SO 2 emissions; DID method; energy consumption structure; technological innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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