Do carbon emission trading schemes stimulate green innovation in enterprises? Evidence from China

Does the Carbon Emissions Trading Policy Increase Corporate Tax Avoidance? Evidence from China

“…The increased intensity of environmental regulations may increase the cost of corporate investment in environmental protection equipment and pollutant treatment improvements, resulting in higher actual product costs, which reduces the competitiveness of corporate products given the same product quality, leading to lower sales or exports of corporate products (Hering and Poncet, 2014), and exacerbating corporate cash flow constraints. Chen et al (2021) pointed out that China's carbon emissions trading policy pilot reduced corporate output, operating income, main operating costs, and net cash flow.…”

“…The increase in R&D investment demand of the regulated firms after implementing the carbon trading pilot may be one of the channels for firms to avoid taxes. Existing studies have not reached a unanimous conclusion on the research of carbon emissions trading on corporate green innovation (Shi et al, 2018;Wang et al, 2019;Chen et al, 2021). On the one hand, before the establishment of the carbon emission trading rights system, firms faced a more relaxed carbon emission reduction constraint, the cost of carbon emissions was low, and the incentive to reduce emissions was not high.…”

Can Emission Trading Scheme Improve Carbon Emission Performance? Evidence From China

“…Cao et al (2021) conducted a retrospective analysis on the effectiveness of the China's ETS pilot policy in reducing carbon emissions in the power industry, and found that the China's ETS pilot policy did not significantly improve the carbon efficiency of coal-fired power plants, because the production activities of power plants are subject to the instructions of the competent authorities, and the power industry in China is highly regulated. Chen et al (2021) analyzed green patent data of listed companies in 31 provinces (municipalities or autonomous regions) from 1990 to 2018 and found that the China's ETS pilot policy significantly reduced the proportion of green patents. In addition, companies mainly achieve emission reduction targets by reducing production.…”

Carbon price prediction for China's ETS pilots using variational mode decomposition and optimized extreme learning machine

“…However, the main inducing factor of climate change is carbon emissions, which has been used as a significant reference point for the evaluation of future climate change in the prediction models (Tierney et al, 2020 ). In this connection, it can be perceived that reducing carbon emissions is the key to mitigating climate change and enactments of a variety of environmental regulation mechanisms, such as mandatory, voluntary, and market-oriented systems have been observed to reduce emissions (Chen et al, 2021 ). As a market-oriented policy instrument in particular, carbon emissions trading has been recognized to be an effective mechanism to achieve low-cost emissions reduction (Bauer et al, 2020 ; Cui et al, 2014 ; Daskalakis, 2013 ; Zhang & Wei, 2010 ).…”