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Updated: Sep 1, 2025

Design and Use of a Full Flow Sampling System FFS for the Quantification of Methane Emissions
Published on: June 12, 2016
Emission Trading System, Carbon Market Efficiency, and Corporate Innovations
Rui Zhu1, Liyu Long1, Yinghua Gong2
1Economics and Management School, Changsha University of Science and Technology, Changsha 410114, China.
Abstract:
Taking China's emission trading system (ETS) pilot in 2013 as a quasi-natural experiment, this paper uses the difference-in-differences (DID) models to study whether the regional pilot ETS can promote technological innovation in enterprises. In addition, this paper examines the influence mechanism of the ETS innovation effect, with a focus on three key dimensions of the carbon market efficiency: market price effectiveness, market product diversity, and market order normativity. The results show that the pilot ETS has significantly promoted the technological innovation of regulated enterprises, specifically, 1.405*** for the total R&D investment, and 2.783*** for the number of patent applications. Moreover, the regional carbon price has a positive moderating effect on the innovation effect of ETS. Meanwhile, the innovation effect is more significant when the gap between the carbon price and the marginal abatement cost (MAC) of CO2 is smaller, when the carbon financial derivatives are more abundant, or when the local market supervision is stronger. This study provides empirical evidence for the improvement of the national unified market and provides useful policy implications for developing countries to design ETS suitable for their national conditions.
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