Carbon Emissions Trading and Environmental Protection: International Evidence

Jennie Bai () and Hong Ru ()
Additional contact information
Jennie Bai: Georgetown University and NBER, Washington, District of Columbia 20057
Hong Ru: Nanyang Business School, Nanyang Technological University, Singapore, Singapore 639798

Management Science, 2024, vol. 70, issue 7, 4593-4603

Abstract: We study how the implementation of emissions trading systems (ETSs) impacts emissions reductions and the usage of renewable energy using a panel sample of the largest 100 countries worldwide. Exploiting cross-country variations in ETS implementations, we show that ETS adoption materially reduced greenhouse gas (carbon dioxide) emissions by 12.1% (18.1%). Moreover, ETSs reduced overall emissions by cutting the usage of fossil fuels such as coal by 23.70% while boosting the usage of renewable energy by 61.59%, on average. In contrast, introducing carbon taxes has a less effective impact on emissions reduction. It fails to boost the usage of renewable energy, though elevating tax rates and expanding tax coverage may help enhance the efficacy of carbon taxes.

Keywords: emissions trading system; greenhouse gas; renewable energy; climate policy (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.2023.03143 (application/pdf)

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:inm:ormnsc:v:70:y:2024:i:7:p:4593-4603

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().