The Impact of Carbon Trading Pilot Policy on Carbon Neutrality: Empirical Evidence from Chinese Cities

Ke Zhang, Jing Qian, Zhenhua Zhang and Shijiao Fang ()
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Ke Zhang: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China
Jing Qian: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China
Zhenhua Zhang: Institute of Green Finance, Lanzhou University, Lanzhou 730000, China
Shijiao Fang: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China

IJERPH, 2023, vol. 20, issue 5, 1-23

Abstract: As one of a number of crucial policies for achieving the goal of “double carbon”, it is crucial to investigate the “carbon neutral” effect of the carbon trading market (CTM) in the pilot phase, which is an essential reference for the development of a future CTM. Based on panel data of 283 cities in China in the period from 2006 to 2017, this paper examines the impact of the Carbon Trading Pilot Policy (CTPP) on the achievement of the “carbon neutrality” target. The study shows that the CTPP market can promote an increase in regional net carbon sinks and further accelerate the achievement of the “carbon neutrality” goal. The findings of the study remain valid after a series of robustness tests. The mechanism analysis finds that the CTPP can help achieve the carbon neutrality target through three mechanisms: the effect on concern for the environment, the effect on urban governance, and the effect on energy production and consumption. Further analysis reveals that enterprises’ willingness and productive behavior, as well as the internal elements of the market, have a positive moderating effect on the achievement of the carbon neutrality target. In addition, there is heterogeneity among regions with different technological endowments, CTPP regions, and regions with different shares of state-owned assets in the CTM. This paper provides important practical references and empirical evidence that can help China to better achieve the “carbon neutrality” target.

Keywords: carbon trading pilot; carbon neutrality; net carbon sink (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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