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Is Emissions Trading Scheme (ETS) an Effective Market-Incentivized Environmental Regulation Policy? Evidence from
Shanglei Chai1, Ruixuan Sun1, Ke Zhang1
1Business School, Shandong Normal University, Jinan 250358, China.
China's carbon trading policy, implemented since 2013, has shown effectiveness in reducing emissions. The study suggests coordinating the unified carbon market with regional development for better ecological compensation and mitigation strategies.
Area of Science:
- Environmental Economics
- Climate Policy
- Sustainable Development
Background:
- Global concern over carbon emissions and climate change drives policy innovation.
- China is developing a national carbon emissions trading scheme (ETS) to incentivize emission reductions through carbon pricing.
- Evaluating the effectiveness of China's ETS pilots launched since 2013 is crucial for policy refinement.
Purpose of the Study:
- To assess the impact of China's ETS implementation on carbon emission reductions.
- To evaluate the emission-reduction efficiency of pilot ETS programs in China.
- To analyze the relationship between green economic growth and regional GDP.
Main Methods:
- Difference-in-Differences (DID) method to evaluate ETS impact on emissions.
- Super-Slacks-Based Measure (Super-SBM) model within Data Envelopment Analysis (DEA) for efficiency assessment.
- Analysis of pilot ETS programs across eight regions in China.
Main Results:
- The carbon trading policy demonstrated significant emission-reduction effects during its implementation phase.
- Economic growth's greenness positively influenced regional Gross Domestic Product (GDP).
- The study identified a need for better coordination between the unified carbon market and regional development strategies.
Conclusions:
- China's ETS is an effective market-incentivized environmental regulatory policy for emission reduction.
- Regional development and ecological compensation require integrated policy measures.
- Future policy should focus on harmonizing the national carbon market with diverse regional needs and development levels.
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