The impact of China's carbon trading policy on enterprises' energy-saving behavior

Qianling Zhou; Xiaoyong Cui; Hongfu Ni; Liutang Gong; Shengzhi Mao

doi:10.1016/j.heliyon.2024.e24326

The impact of China's carbon trading policy on enterprises' energy-saving behavior

Heliyon. 2024 Jan 11;10(2):e24326. doi: 10.1016/j.heliyon.2024.e24326. eCollection 2024 Jan 30.

Authors

Qianling Zhou¹, Xiaoyong Cui², Hongfu Ni³, Liutang Gong^{4

5}, Shengzhi Mao⁶

Affiliations

¹ School of Economics, Beijing Technology and Business University, Beijing, 100048, China.
² School of Economics, Peking University, Beijing, 100871, China.
³ Institute of Economics, Chinese Academy of Social Sciences, Beijing, 100871, China.
⁴ Guanghua School of Management, Peking University, Beijing, 100871, China.
⁵ Beijing Technology and Business University, Beijing, 100048, China.
⁶ School of Economics, Southwestern University of Finance and Economics, Chengdu, 610074, China.

Abstract

This paper mainly investigates whether emissions trading for pollutant permits more effective. By employing difference-in-differences method and a compressive firm-level dataset, we evaluate the impact of carbon trading system pilot cities policy on enterprises' energy-saving behavior. The findings indicate that after carbon trading system pilot cities policy, enterprises' coal consumption and coal intensity decreased by almost 34 % and 33 % respectively. The policy effect is more pronounced for larger companies and for firms in energy-intensive sectors. Moreover, the policy effect becomes stronger over time. Our results satisfy the common trend assumption. Meanwhile, the investment in equipment and output are increased, which prove emissions marketization could bring about substantial improvements in productivity.

Keywords: Carbon emissions trading policy; Difference-in-differences method; Firm-level energy intensity.