Did carbon emission trading system reduce emissions in China? An integrated approach to support policy modeling and implementation

Abstract

As the highest carbon emission country in the world, it is particularly important to investigate the implementation effect of China’s carbon emission trading (CET) system. Because of the complexity to figure out the counterfactual effect when a single unit is treated, the counterfactual and causal effects of the CET system on the carbon emissions are seldom identified. In order to overcome the weakness that counterfactual effect is difficult to be verified and policy persistence is difficult to be estimated, Synthetic Control Method (SCM) and Regression Discontinuity (RD) are combined to better understand and evaluate the impact of CET system in China. Through the analysis, it is found that CET system is effective in China, but the effect is driven by economic development, energy consumption, FDI and other variables. Because of the differences in economic, geographical, technological and environmental conditions in various areas, each Chinese provincial government should formulate a targeted policy according to local conditions, ensuring an economic and environmentally sustainable growth in the future.

Multifaceted Pathways of Carbon Emission Reduction Policies: A Study Based on the Decoupling Effect and fsQCA Method in the Yangtze River Delta Urban Agglomeration

“…The present research on carbon emission reduction policy effects primarily focuses on post-implementation scenarios of certain policy types. For instance, studies delve into the impacts of low-carbon pilot policies [10][11][12][13][14], efficiency evaluation of carbon trading policies [15][16][17][18][19][20]24], the effectiveness and impact mechanisms of energy-saving policies [24][25][26], and the implementation effects of a carbon tax policy [21][22][23]. Simultaneously, influences of policies outside the carbon reduction sphere like economic policy [31], energy policy [32], and transportation policy on carbon emission reduction are also noted [5].…”

“…Current research on the effects of carbon reduction policy implementation primarily relies on quasi-natural experiments, comparing similar units after policy implementation. These include policies on low-carbon pilots [10][11][12][13][14], carbon trading [15][16][17][18][19][20], carbon taxes [21][22][23], and energy conservation [24][25][26]. However, in-depth studies on the impacts of the combination of these carbon reduction policies are relatively scarce.…”

Estimating the Employment and Fiscal Consequences of Thermal Coal Phase-Out in China

“…The pilot programmes were expected to be problematic, and indeed experienced design-and context-induced difficulties, with low prices and volumes, insufficient market supervision [48,49] and consequently weak incentives to choose emissions abatement over acquiring more permits. Evaluation of the programmes' success suggests that, while there is evidence that the ETS pilots were associated with lower emissions [50,51], other contributing factors included levels of economic development, higher population density, greater economic openness (which could enable carbon leakage, particularly where emissions could be relocated to less population-dense parts of China), research expenditure, and strength of environmental regulations, as well as the maturity of the trading market, with the wealthier Eastern provinces seeing higher prices and greater emissions reductions relative to counterfactual baselines [52]. The national ETS was launched in July 2021, although it retains many of the design elements of the pilots and its role in slowing or accelerating the coal transition is not yet clear.…”

A systematic literature review on hybrid energy system

“…The generation of energy from fossil fuel is the reason of pollution in environment because, when fossil fuel burns, it releases CO 2 in the environment that results in increasing atmospheric temperature. 57 Power generation sectors released NO 2 , SO 2 , and other gases which are the main cause of acid rain. Almost 2.7 billion people all over the world are living their lives without a less polluted cooking facility and 1.2 billion people are living their lives with no electricity.…”