Using green technology for a better tomorrow: How enterprises and government utilize the carbon trading system and incentive policies

Hui Hu, Shaozhou Qi and Yuanzhi Chen

China Economic Review, 2023, vol. 78, issue C

Abstract: This unique study focuses on how the carbon trading system (CTS), stakeholder concerns and innovation incentive policies all combine to effect enterprises' green technology innovation. Using a three-dimension system, this study includes green output level, green output proportion and green total factor productivity. Utilizing a DID model of an unbalanced panel, we investigate how government and enterprise work together better to achieve carbon emission targets. The main findings are as follows: (1) Enterprises are displaying a high level of concern with environmental information disclosure and therefore their CTS will have a more significant impact on green technology output and the proportion of this green output. In contrast, government concerns about decarbonization with CTS have uncertain effects on the three dimensions of green technology innovation. (2) CTS Fiscal subsidies and R&D funding are strong ways to improve enterprises' green technology output. However, the best way to improve green technology output, green output proportion and green total factor productivity is with tax returns. When tax returns increase 1%, the green output level increases 1.5% under the CTS. (3) This study, utilizing data from the impact of different implementation modes of innovations incentive policies, shows that inclusive innovation policies make CTS's combined effects more significant than differentiated policies.

Keywords: Carbon trading system; Combined effects; Green technology innovation; Stakeholder concerns; Innovation incentive policies; Implementation modes of policies (search for similar items in EconPapers)
JEL-codes: Q55 Q58 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:78:y:2023:i:c:s1043951x23000184

DOI: 10.1016/j.chieco.2023.101933

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