scholarly journals Low-carbon innovation induced by emissions trading in China

2019 ◽  
Vol 10 (1) ◽  
Author(s):  
Junming Zhu ◽  
Yichun Fan ◽  
Xinghua Deng ◽  
Lan Xue
Keyword(s):  
Emissions Trading ◽  
Low Carbon ◽  
Firm Characteristics ◽  
Firm Level ◽  
Permit Price ◽  
National Market ◽  
Allowance Allocation ◽  
Quasi Experimental ◽  
Price Auction ◽  
Trading Scheme

Abstract Emissions trading scheme (ETS) has been adopted by an increasing number of countries and regions for carbon mitigation, but its actual effect depends on specific program design and institutional context. Before launching the world largest ETS, China experimented with seven independent regional pilots, whose effects are only indirectly explored. Here we provide firm-level evidence of the innovation effect directly from China’s pilot emissions trading, based on latest patenting information and a quasi-experimental design. China’s pilots increase low-carbon innovation of ETS firms by 5–10% without crowding out their other technology innovation. The increase from ETS firms accounts for about 1% increase of the regional low-carbon patents, while a similar increase from large non-ETS firms is also induced by the ETS. Most importantly, the effect is not associated with permit price, auction, or firm characteristics, but is driven by mass-based allowance allocation. A rate-based approach, however, is adopted by China’s national market.

scholarly journals Carbon Pricing Induces Innovation: Evidence from China's Regional Carbon Market Pilots

2018 ◽  
Vol 108 ◽  
pp. 453-457 ◽  
Author(s):  
Jingbo Cui ◽  
Junjie Zhang ◽  
Yang Zheng
Keyword(s):  
Patent Application ◽  
Emission Trading ◽  
Carbon Price ◽  
Low Carbon ◽  
Firm Level ◽  
Listed Firms ◽  
Allowance Trading ◽  
Application Data ◽  
Trading Scheme ◽  
Low Carbon Technologies

China has launched seven regional pilots of emission trading scheme (ETS) to limit its carbon emissions. Taking advantage of the variations in the regional ETS pilots across regions and sectors and over time, we employ a difference-in-difference-indifferences (DDD) approach to evaluate the effect of ETS on low-carbon innovation at the firm level. Using patent application data of publicly-listed firms in China between 2003 and 2015, we find that the ETS pilots induced innovation in low-carbon technologies. The more active pilots—measured by carbon price and turnover rate of allowance trading—are associated with more intense low-carbon innovation.

Carbon as an Emerging Tool for Risk Management

2011 ◽  
pp. 221-240
Author(s):  
Tenke A. Zoltáni
Keyword(s):  
Risk Management ◽  
Value Chain ◽  
Emissions Trading ◽  
Business Models ◽  
Low Carbon ◽  
The European Union ◽  
Reputational Risk ◽  
Sustainability Strategies ◽  
Trading Scheme ◽  
New Generation

Since 2005, when the European Union Emissions Trading Scheme (EU ETS) launched, green adoption in business and industry has been marred by fraudulent carbon credits, VAT swindlers and carbon cowboys, inefficiencies of a nascent market, and not least of all by legislative uncertainty. The disrepute afforded by these examples hindered low carbon growth and deterred emerging business models from adopting more carbon friendly practices. But, as this chapter argues, the shift toward liberal environmentalism has yielded a new generation of businesses seeking to incorporate carbon assets, emissions trading, and sustainability strategies across the value chain. Central to this shift is the notion of carbon as a tool for risk management in businesses, which occurred through the instrumentalisation of CO2 into a tradable asset. By utilising carbon as a financial instrument, businesses are able to manage project risk, market risk, and reputational risk more effectively. This chapter demonstrates this argument through industry examples and provides practical advice for businesses today.

scholarly journals Optimal Operational Strategy for Power Producers in Korea Considering Renewable Portfolio Standards and Emissions Trading Schemes

Energies ◽  
2019 ◽  
Vol 12 (9) ◽  
pp. 1667 ◽  
Author(s):  
Dongmin Son ◽  
Joonrak Kim ◽  
Bongju Jeong
Keyword(s):  
Emissions Trading ◽  
Policy Implications ◽  
Renewable Portfolio Standard ◽  
Low Carbon ◽  
Operational Strategy ◽  
Korean Government ◽  
Carbon Emissions Reduction ◽  
Expansion Plan ◽  
Trading Scheme ◽  
The Impact

Globally, many countries are experiencing economic growth while concurrently increasing their energy consumption. Several have begun to consider a low-carbon energy mix to mitigate the environmental impacts caused by increased fossil fuel consumption. In terms of maximizing profits, however, power producers are not sufficiently motivated to expand capacity due to high costs. Thus, the Korean government initiated the Renewable Portfolio Standard (RPS), an obligation to generate a certain proportion of a producer’s total generation using renewable energy for power producers with capacities of 500 MW or more, and the Emissions Trading Scheme (ETS), designed to attain a carbon emissions reduction goal. We propose a mathematical model to derive the optimal operational strategy for maximizing power producer profits with a capacity expansion plan that meets both regulations. As such, the main purpose of this study was to obtain the optimal operational strategy for each obligatory power producer. To that end, we defined a 2 × 2 matrix to classify their types and to conduct scenario-based analyses to assess the impact of major factor changes on solutions for each type of power producer. Finally, for the power generation industry to operate in a sustainable and eco-friendly manner, we extracted policy implications that the Korean government could consider for each type of power producer.

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