Economics at your fingertips  

Structural, Innovation and Efficiency Effects of Environmental Regulation: Evidence from China’s Carbon Emissions Trading Pilot

Cenjie Liu, Chunbo Ma and Rui Xie ()
Additional contact information
Cenjie Liu: Hunan University
Chunbo Ma: University of Western Australia
Rui Xie: Hunan University

Environmental & Resource Economics, 2020, vol. 75, issue 4, No 3, 768 pages

Abstract: Abstract Conventional wisdom argues that environmental regulation can trigger both structural adjustments and enhanced innovation. We test this conjecture by using a difference-in-differences approach to analyze the impacts of China’s carbon emission trading (CET) pilot policy on energy consumption. We find that compliance with the CET regulation has triggered statistically significant adjustments in energy structure, industrial structure, and technological innovation. Adjustments in industrial structure also contribute to enhanced total factor energy efficiency, whereas increased technological innovation has mixed effects on energy efficiency. We show that in the short run, government-led innovation does not immediately contribute to improvement in energy efficiency, whereas enterprise-led innovation has a negative impact. It indicates that CET regulation can affect energy efficiency through industrial structure and technological innovation. Overall, our results provide new evidence for the strong version of the Porter hypothesis. Our results also provide strong scientific support for China’s recent transition towards market-based carbon mitigation strategies.

Keywords: China’s emission trading; Total factor energy efficiency; Porter hypothesis; Difference-in-differences (DID); Difference-in-difference-in-differences (DDD) (search for similar items in EconPapers)
JEL-codes: Q54 Q56 Q58 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:

Ordering information: This journal article can be ordered from
http://www.springer. ... al/journal/10640/PS2

DOI: 10.1007/s10640-020-00406-3

Access Statistics for this article

Environmental & Resource Economics is currently edited by Ian J. Bateman

More articles in Environmental & Resource Economics from Springer, European Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2020-06-20
Handle: RePEc:kap:enreec:v:75:y:2020:i:4:d:10.1007_s10640-020-00406-3