Low-carbon innovation induced by emissions trading in China

Junming Zhu (), Yichun Fan, Xinghua Deng () and Lan Xue
Additional contact information
Junming Zhu: Tsinghua University
Yichun Fan: Massachusetts Institute of Technology
Xinghua Deng: Southwestern University of Finance and Economics
Lan Xue: Tsinghua University

Nature Communications, 2019, vol. 10, issue 1, 1-8

Abstract: Abstract Emissions trading scheme (ETS) has been adopted by an increasing number of countries and regions for carbon mitigation, but its actual effect depends on specific program design and institutional context. Before launching the world largest ETS, China experimented with seven independent regional pilots, whose effects are only indirectly explored. Here we provide firm-level evidence of the innovation effect directly from China’s pilot emissions trading, based on latest patenting information and a quasi-experimental design. China’s pilots increase low-carbon innovation of ETS firms by 5–10% without crowding out their other technology innovation. The increase from ETS firms accounts for about 1% increase of the regional low-carbon patents, while a similar increase from large non-ETS firms is also induced by the ETS. Most importantly, the effect is not associated with permit price, auction, or firm characteristics, but is driven by mass-based allowance allocation. A rate-based approach, however, is adopted by China’s national market.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (87)

Downloads: (external link)
https://www.nature.com/articles/s41467-019-12213-6 Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nat:natcom:v:10:y:2019:i:1:d:10.1038_s41467-019-12213-6

Ordering information: This journal article can be ordered from
https://www.nature.com/ncomms/

DOI: 10.1038/s41467-019-12213-6

Access Statistics for this article

Nature Communications is currently edited by Nathalie Le Bot, Enda Bergin and Fiona Gillespie

More articles in Nature Communications from Nature
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().