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The Shadow Prices of Carbon Emissions in China’s Planting Industry

Xiaoliang Guan (), Junbiao Zhang (), Xianrong Wu () and Linlin Cheng ()
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Xiaoliang Guan: College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China
Junbiao Zhang: College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China
Xianrong Wu: Law and Business School, Wuhan Institute of Technology, Wuhan 430070, China
Linlin Cheng: College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China

Sustainability, 2018, vol. 10, issue 3, 1-12

Abstract: The shadow prices of carbon emissions are essential for assessing emission abatement costs and formulating environmental public policies. By adopting the directional distance function method, this paper studies the shadow prices of carbon emissions caused by three main emission sources from China’s planting industry for a panel of 30 provinces spanning the period 1997–2014. We find that there is considerable regional heterogeneity in the shadow prices, and, of the 30 provinces, 23 are characterized by decreasing trends while only seven are on the rise over time. This implies that there is inefficiency of resource allocation among provinces, and the capacity for abatement increases during the observed period. The results support the following recommendation: It might be worth attempting to bring agriculture in China into line with its emission rights trading scheme, not only to help motivate the reduction of emissions but also to improve resource allocation. Also, policymakers are required to enhance regional cooperation and facilitate carbon-reduction technology transfer, to improve the immaterial production factors’ contribution to planting industry growth.

Keywords: carbon emissions; directional distance function; shadow price; planting industry; China (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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