Carbon Emissions Trading and Environmental Protection: International Evidence
Jennie Bai (jb2348@georgetown.edu) and
Hong Ru
No 30587, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
We study how the implementation of emissions trading systems (ETS) impacts emissions reductions and the usage of renewable energy using a panel sample of the largest 100 countries worldwide. Exploiting the cross-country variations in ETS implementations, we show that ETS adoption materially reduced greenhouse gas (carbon dioxide) emissions by 12.1% (18.1%). Moreover, ETSs reduced overall emissions by cutting fossil fuel usage, such as coal, by 23.70% while boosting the usage of renewable energy by 61.59%, on average. In contrast, the introduction of carbon taxes has a less effective impact on emissions reduction and fails to boost the usage of renewable energy.
JEL-codes: E62 H23 Q54 Q58 (search for similar items in EconPapers)
Date: 2022-10
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Published as Jennie Bai & Hong Ru, 2024. "Carbon Emissions Trading and Environmental Protection: International Evidence," Management Science, vol 70(7), pages 4593-4603.
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