Can China’s carbon market policy promote inter-city green collaborative innovation?

Guangcheng Ma and Yang Yang

Energy Economics, 2025, vol. 144, issue C

Abstract: This study uses a combination of theoretical models and empirical research to elaborate on whether and how China’s carbon market policy (CMP) affects inter-city green collaborative innovation (GCI). We use the analytical framework of the new economic geography theory to construct an environmental knowledge innovation spillover and diffusion model. Then, we used the data from 342 cities in China between 2002 and 2021. The results indicate that the implementation of the CMP has led to a 35.1% increase in the inter-city GCI. Moreover, the CMP has a greater effect on promoting invention-type GCI, besides, when both cities in city pair are within the scope of the carbon market pilot, there is a stronger collaborative innovation effect. The CMP enhances inter-city GCI when integrated with low-carbon and new energy city pilot policies. Additionally, when the CMP incorporates a pricing or supply adjustment mechanism, its effectiveness in promoting inter-city GCI becomes even more robust. Further analysis indicates that the mobility of talent, information flow, capital accumulation, and the material flow associated with the emergence of new enterprises are the key mechanisms through which CMP drive inter-city GCI. Finally, we discussed the policy aftereffects and found that implementing the CMP will sustainably enhance the capacity of inter-city GCI.

Keywords: Carbon market; Inter-city; Green collaborative innovation; Factor flow (search for similar items in EconPapers)
JEL-codes: O32 Q53 Q56 R1 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988325002221
Full text for ScienceDirect subscribers only

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:eee:eneeco:v:144:y:2025:i:c:s0140988325002221

DOI: 10.1016/j.eneco.2025.108398

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().