Abstract
The carbon emissions trading scheme (CETS) in China is an important market-based environmental policy mechanism for decreasing carbon emissions. This paper calculates the total factor carbon productivity (TFCP) based on data from 275 cities in China from 2007 to 2020 using the DEA method and investigates the impact of the CETS on regional TFCP using the differences-in-differences (DID) method, all against the backdrop of carbon peaking and carbon neutrality. The research findings reveal that CETS has consistently improved TFCP in pilot cities, and this conclusion has held up following a number of robustness tests. Temporal heterogeneity experiments demonstrate that as implementation time increases, the enhancing effect takes on an inverted “U-shaped” structure with a 7-year effective lifetime. Spatial heterogeneity studies reveal that as one moves away from the pilot cities, the policy effect on surrounding cities’ TFCP is inhibited, followed by facilitation. CETS policies can influence regional TFCP through the effects of green innovation and industry upgrading, according to mediation mechanism testing. We present policy recommendations based on the research findings for meeting the “dual” carbon goals and strengthening the carbon trading mechanism.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Data availability
Not applicable.
References
Bai C, Liu H, Zhang R, Feng C (2023) Blessing or curse? Market-driven environmental regulation and enterprises’; total factor productivity: evidence from China’s carbon market pilots. Energy Econ 117:106432. https://doi.org/10.1016/j.eneco.2022.106432
Cao R, Xiao Y, Yin F (2023) Spatio-temporal evolution of high-quality development and the impact of carbon emissions trading schemes. Sustainability 15(4):2900. https://doi.org/10.3390/su15042900
Chang J, Ciais P, Gasser T, Smith P, Herrero M, Havlik P, Obersteiner M, Guenet B, Goll DS, Li W, Naipal V, Peng S, Qiu C, Tian H, Viovy N, Yue C, Zhu D (2021) Climate warming from managed grasslands cancels the cooling effect of carbon sinks in sparsely grazed and natural grasslands. Nat Commun 12(1):118. https://doi.org/10.1038/s41467-020-20406-7
Chen L, Liu Y, Gao Y, Wang J (2021a) Carbon emission trading policy and carbon emission efficiency: an empirical analysis of China’s prefecture-level cities. Front Energy Res 9:793601. https://doi.org/10.3389/fenrg.2021.793601
Chen M, Wang K (2023) The combining and cooperative effects of carbon price and technological innovation on carbon emission reduction: evidence from China’s industrial enterprises. J Environ Manage 343:118188. https://doi.org/10.1016/j.jenvman.2023.118188
Chen S, Golley J (2014) ‘Green’ productivity growth in China’s industrial economy. Energy Econ 44:89–98. https://doi.org/10.1016/j.eneco.2014.04.002
Chen Y, Miao J, Zhu Z (2021b) Measuring green total factor productivity of China’s agricultural sector: a three-stage SBM-DEA model with non-point source pollution and CO2 emissions. J Clean Prod 318:128543. https://doi.org/10.1016/j.jclepro.2021.128543
Chen Z, Zhang X, Chen F (2021c) Do carbon emission trading schemes stimulate green innovation in enterprises? Evidence from China. Technol Forecast Soc Change 168:120744. https://doi.org/10.1016/j.techfore.2021.120744
Cui J, Dai J, Wang Z, Zhao X (2022) Does environmental regulation induce green innovation? A panel study of Chinese listed firms. Technol Forecast Soc Change 176:121492. https://doi.org/10.1016/j.techfore.2022.121492
Dechezlepretre A, Nachtigall D, Venmans F (2023) The joint impact of the European Union emissions trading system on carbon emissions and economic performance*. J Environ Econ Manage 118:102758. https://doi.org/10.1016/j.jeem.2022.102758
Dong F, Dai Y, Zhang S, Zhang X, Long R (2019) Can a carbon emission trading scheme generate the Porter effect? Evidence from pilot areas in China. Sci Total Environ 653:565–577. https://doi.org/10.1016/j.scitotenv.2018.10.395
Dong Z, Xia C, Fang K, Zhang W (2022) Effect of the carbon emissions trading policy on the co-benefits of carbon emissions reduction and air pollution control. Energy Policy 165:112998. https://doi.org/10.1016/j.enpol.2022.112998
Du K, Cheng Y, Yao X (2021) Environmental regulation, green technology innovation, and industrial structure upgrading: the road to the green transformation of Chinese cities. Energy Econ 98:105247. https://doi.org/10.1016/j.eneco.2021.105247
Du K, Li J (2019) Towards a green world: how do green technology innovations affect total-factor carbon productivity. Energy Policy 131:240–250. https://doi.org/10.1016/j.enpol.2019.04.033
Fang T, Fang D, Yu B (2022) Carbon emission efficiency of thermal power generation in China: empirical evidence from the micro-perspective of power plants. Energy Policy 165:112955. https://doi.org/10.1016/j.enpol.2022.112955
Gao P, Wang Y, Zou Y, Su X, Che X, Yang X (2022) Green technology innovation and carbon emissions nexus in China: does industrial structure upgrading matter? Front Psychol 13:951172. https://doi.org/10.3389/fpsyg.2022.951172
Guo Y, Chen J, Shi F, Peng X, Ma X, Fang D (2022) The effect of China’s carbon emission trading on eco-efficiency: an empirical study at the city level. Environ Sci Pollut Res 29(56):84827–84843. https://doi.org/10.1007/s11356-022-21617-9
Hasanov FJ, Khan Z, Hussain M, Tufail M (2021) Theoretical framework for the carbon emissions effects of technological progress and renewable energy consumption. Sustain Dev 29(5):810–822. https://doi.org/10.1002/sd.2175
He Y, Song W (2022) Analysis of the impact of carbon trading policies on carbon emission and carbon emission efficiency. Sustainability 14(16):10216. https://doi.org/10.3390/su141610216
Hong Q, Cui L, Hong P (2022) The impact of carbon emissions trading on energy efficiency: evidence from quasi-experiment in China?s carbon emissions trading pilot. Energy Econ 110:106025. https://doi.org/10.1016/j.eneco.2022.106025
Huang W, Wang Q, Li H, Fan H, Qian Y, Klemes JJ (2022) Review of recent progress of emission trading policy in China. J Clean Prod 349:131480. https://doi.org/10.1016/j.jclepro.2022.131480
Jin C, Tsai F-S, Gu Q, Wu B (2022) Does the porter hypothesis work well in the emission trading schema pilot? Exploring moderating effects of institutional settings. Res Int Bus Financ 62:101732. https://doi.org/10.1016/j.ribaf.2022.101732
Li G, Gao D, Li Y (2023) Impacts of market-based environmental regulation on green total factor energy efficiency in China. Chin World Econ 31(3):92–114. https://doi.org/10.1111/cwe.12485
Lin B, Huang C (2022) Analysis of emission reduction effects of carbon trading: market mechanism or government intervention? Sustain Prod Consumpt 33:28–37. https://doi.org/10.1016/j.spc.2022.06.016
Liu D, Zhu X, Wang Y (2021) China’s agricultural green total factor productivity based on carbon emission: an analysis of evolution trend and influencing factors. J Clean Prod 278:123692. https://doi.org/10.1016/j.jclepro.2020.123692
Liu L, Chen C, Zhao Y, Zhao E (2015) China’s carbon-emissions trading: overview, challenges and future. Renew Sustain Energy Rev 49:254–266. https://doi.org/10.1016/j.rser.2015.04.076
Liu X, Cifuentes-Faura J, Zhao S, Wang L (2023a) Government environmental attention and carbon emissions governance: firm-level evidence from China. Econ Anal Policy 80:121–142. https://doi.org/10.1016/j.eap.2023.07.016
Liu X, Zhang W, Liu X, Li H (2022) The impact assessment of FDI on industrial green competitiveness in China: based on the perspective of FDI heterogeneity. Environ Impact Assess Rev 93:106720. https://doi.org/10.1016/j.eiar.2021.106720
Liu Y, Zhao X, Kong F (2023b) The dynamic impact of digital economy on the green development of traditional manufacturing industry: evidence from China. Econ Anal Policy 80:143–160. https://doi.org/10.1016/j.eap.2023.08.005
Liu Z, Sun H (2021) Assessing the impact of emissions trading scheme on low-carbon technological innovation: evidence from China. Environ Impact Assess Rev 89:106589. https://doi.org/10.1016/j.eiar.2021.106589
Ma X, Xue Y (2022) How does carbon emission trading scheme affect enterprise green technology innovation: evidence from China’s A-share non-financial listed companies. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-022-24768-x
Pan X, Pu C, Yuan S, Xu H (2022) Effect of Chinese pilots carbon emission trading scheme on enterprises’ total factor productivity: the moderating role of government participation and carbon trading market efficiency. J Environ Manage 316:115228. https://doi.org/10.1016/j.jenvman.2022.115228
Shi B, Li N, Gao Q, Li G (2022a) Market incentives, carbon quota allocation and carbon emission reduction: evidence from China’s carbon trading pilot policy. J Environ Manage 319:115650. https://doi.org/10.1016/j.jenvman.2022.115650
Shi X, Xu Y, Sun W (2022b) Evaluating China’s pilot carbon emission trading scheme: collaborative reduction of carbon and air pollutants. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-022-24685-z
Tang M, Cheng S, Guo W, Ma W, Hu F (2022) Relationship between carbon emission trading schemes and companies’ total factor productivity: evidence from listed companies in China. Environ Dev Sustain. https://doi.org/10.1007/s10668-022-02552-8
Wang C, Wang L, Wang W, Xiong Y, Du C (2023) Does carbon emission trading policy promote the corporate technological innovation? Empirical evidence from China’s high-carbon industries. J Clean Prod 411:137286. https://doi.org/10.1016/j.jclepro.2023.137286
Wang Q, Jiang F, Li R, Wang X (2022) Does protectionism improve environment of developing countries? A perspective of environmental efficiency assessment. Sustain Prod Consumpt 30:851–869. https://doi.org/10.1016/j.spc.2022.01.011
Wu Q, Wang Y (2022) How does carbon emission price stimulate enterprises’ total factor productivity? Insights from China’s emission trading scheme pilots. Energy Econ 109:105990. https://doi.org/10.1016/j.eneco.2022.105990
Wu R, Tan Z, Lin B (2023) Does carbon emission trading scheme really improve the CO2 emission efficiency? Evidence from China’s iron and steel industry. Energy 277:127743. https://doi.org/10.1016/j.energy.2023.127743
Xie L, Zhou Z, Hui S (2022) Does environmental regulation improve the structure of power generation technology? Evidence from China’s pilot policy on the carbon emissions trading market(CETM). Technol Forecast Soc Change 176:121428. https://doi.org/10.1016/j.techfore.2021.121428
Xin L, Sun H, Xia X (2023a) Renewable energy technology innovation and inclusive low-carbon development from the perspective of spatiotemporal consistency. Environ Sci Pollut Res 30(8):20490–20513. https://doi.org/10.1007/s11356-022-23556-x
Xin L, Sun H, Xia X (2023b) Spatial-temporal differentiation and dynamic spatial convergence of inclusive low-carbon development: evidence from China. Environ Sci Pollut Res 30(2):5197–5215. https://doi.org/10.1007/s11356-022-22539-2
Xuan D, Ma X, Shang Y (2020) Can China’s policy of carbon emission trading promote carbon emission reduction? J Clean Prod 270:122383. https://doi.org/10.1016/j.jclepro.2020.122383
Yang S, Jahanger A, Hossain MR (2023) How effective has the low-carbon city pilot policy been as an environmental intervention in curbing pollution? Evidence from Chinese industrial enterprises. Energy Econ 118:106523. https://doi.org/10.1016/j.eneco.2023.106523
Yang X, Wang W, Wu H, Wang J, Ran Q, Ren S (2022) The impact of the new energy demonstration city policy on the green total factor productivity of resource-based cities: empirical evidence from a quasi-natural experiment in China. J Environ Plan Manag 66(2):293–326. https://doi.org/10.1080/09640568.2021.1988529
Yang Z, Shen Y (2023) The impact of intelligent manufacturing on industrial green total factor productivity and its multiple mechanisms. Front Environ Sci 10:1058664. https://doi.org/10.3389/fenvs.2022.1058664
You J, Zhang W (2022) How heterogeneous technological progress promotes industrial structure upgrading and industrial carbon efficiency? Evidence from China’s industries. Energy 247:123386. https://doi.org/10.1016/j.energy.2022.123386
Yu X, Wang P (2021) Economic effects analysis of environmental regulation policy in the process of industrial structure upgrading: evidence from Chinese provincial panel data. Sci Total Environ 753:142004. https://doi.org/10.1016/j.scitotenv.2020.142004
Yuan B, Xiang Q (2018) Environmental regulation, industrial innovation and green development of Chinese manufacturing: based on an extended CDM model. J Clean Prod 176:895–908. https://doi.org/10.1016/j.jclepro.2017.12.034
Yue X, Zhao S, Ding X, Xin L (2023) How the pilot low-carbon city policy promotes urban green innovation: based on temporal-spatial dual perspectives. Int J Environ Res Public Health 20(1):561. https://doi.org/10.3390/ijerph20010561
Zhai X, An Y, Shi X, Cui H (2023) Emissions trading scheme and green development in China: impact of city heterogeneity. Sustainable Development. https://doi.org/10.1002/sd.2533
Zhang H, Sun X, Ahmad M, Wang X (2023) Heterogeneous impacts of carbon emission trading on green innovation: firm-level in China. Energy & Environment. https://doi.org/10.1177/0958305x231164690
Zhang M, Sun X, Wang W (2020) Study on the effect of environmental regulations and industrial structure on haze pollution in China from the dual perspective of independence and linkage. J Clean Prod 256:120748. https://doi.org/10.1016/j.jclepro.2020.120748
Zhang N, Wei X (2015) Dynamic total factor carbon emissions performance changes in the Chinese transportation industry. Appl Energy 146:409–420. https://doi.org/10.1016/j.apenergy.2015.01.072
Zhang S, Wang Y, Hao Y, Liu Z (2021) Shooting two hawks with one arrow: could China’s emission trading scheme promote green development efficiency and regional carbon equality? Energy Econ 101:105412. https://doi.org/10.1016/j.eneco.2021.105412
Zhang W, Li G, Guo F (2022) Does carbon emissions trading promote green technology innovation in China? Appl Energy 315:119012. https://doi.org/10.1016/j.apenergy.2022.119012
Zhang Y-J, Wang A-D, Tan W (2015) The impact of China’s carbon allowance allocation rules on the product prices and emission reduction behaviors of ETS-covered enterprises. Energy Policy 86:176–185. https://doi.org/10.1016/j.enpol.2015.07.004
Zhao S, Cao Y, Feng C, Guo K, Zhang J (2022) How do heterogeneous R&D investments affect China’s green productivity: revisiting the Porter hypothesis. Sci Total Environ 825:154090. https://doi.org/10.1016/j.scitotenv.2022.154090
Zhao S, Cao Y, Hunjra AI, Tan Y (2023) How does environmentally induced R & D affect carbon productivity? A government support perspective. Int Rev Econ Finance 88:942–961. https://doi.org/10.1016/j.iref.2023.07.022
Zhou B, Zhang C, Song H, Wang Q (2019) How does emission trading reduce China’s carbon intensity? An exploration using a decomposition and difference-in-differences approach. Sci Total Environ 676:514–523. https://doi.org/10.1016/j.scitotenv.2019.04.303
Zhou F, Wang X (2022) The carbon emissions trading scheme and green technology innovation in China: a new structural economics perspective. Econ Anal Policy 74:365–381. https://doi.org/10.1016/j.eap.2022.03.007
Zhou X, Zhang J, Li J (2013) Industrial structural transformation and carbon dioxide emissions in China. Energy Policy 57:43–51. https://doi.org/10.1016/j.enpol.2012.07.017
Zhu L, Chen L, Yu X, Fan Y (2018) Buying green or producing green? Heterogeneous emitters’ strategic choices under a phased emission-trading scheme. Resour Conserv Recycl 136:223–237. https://doi.org/10.1016/j.resconrec.2018.04.017
Funding
No funding.
Author information
Authors and Affiliations
Contributions
YW: conceptualization, investigation, resources, writing—original draft and writing—review and editing
ZL: conceptualization, methodology, and investigation
CW: conceptualization
JZ: validation
Corresponding author
Ethics declarations
Consent to participate
Informed consent was obtained from all individual participants included in the study.
Consent for publication
The participant has consented to the submission of the article research to the journal.
Competing interests
The authors declare no competing interests.
Additional information
Responsible Editor: Ilhan Ozturk
Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
I would like to declare on behalf of my co-authors that the work described was an original research that has not been published previously and is not under consideration for publication elsewhere, in whole or in part.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Wang, Y., Li, Z., Wen, C. et al. Carbon emissions trading scheme and regional total factor carbon productivity: based on temporal-spatial dual perspectives. Environ Sci Pollut Res 30, 119434–119449 (2023). https://doi.org/10.1007/s11356-023-30716-0
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-023-30716-0