How Does Carbon Emissions Trading Impact Energy Transition? A Perspective Based on Local Government Behavior

Yue Tang, Shixiang Li () and Feng Wu
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Yue Tang: School of Public Administration, China University of Geosciences, Wuhan 430074, China
Shixiang Li: School of Public Administration, China University of Geosciences, Wuhan 430074, China
Feng Wu: School of Economics and Management, Tsinghua University, Beijing 100084, China

Sustainability, 2025, vol. 17, issue 12, 1-20

Abstract: Assessing the environmental and economic impacts of the carbon emissions trading scheme (ETS) is both timely and essential. This study investigates the effects of the ETS on energy transition by analyzing panel data from 30 provinces and municipalities across mainland China. The findings highlight three key points. First, the ETS significantly promotes energy transition. Robustness tests confirm the validity of this conclusion. Compared with non-pilot provinces, pilot provinces achieve a 4.83% increase in energy transition levels. Second, the energy transition effect of the ETS is mainly achieved by changing the incentive and constraint behavior of local governments. Third, the ETS exerts a more pronounced impact on energy transition in regions with higher levels of marketization and stronger innovation capabilities. Furthermore, the effects of the ETS vary across different quantiles of energy transition levels. This study provides a novel perspective on achieving the synergistic development of economic growth and environmental sustainability.

Keywords: carbon emissions trading; energy transition; local government behavior; incentive and constraint (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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