scholarly journals Effects of emission trading schemes on corporate carbon productivity and implications for firm-level responses

2021 ◽  
Vol 11 (1) ◽  
Author(s):  
Hail Jung ◽  
Seyeong Song ◽  
Young-Hwan Ahn ◽  
Ha Hwang ◽  
Chang-Keun Song
Keyword(s):  
Emission Trading ◽  
Green Technologies ◽  
Firm Level ◽  
Investment Policies ◽  
South Korean ◽  
High Emission ◽  
Trading Scheme ◽  
Corporate Profits ◽  
Carbon Productivity ◽  
Conflicting Goals

AbstractSince the South Korean government enacted the Emission Trading Scheme (ETS), companies have been striving to simultaneously improve productivity and reduce carbon emissions, which represent conflicting goals. We used firm-level emissions and corporate variables to investigate how ETS enactment has affected carbon productivity, which is a firm-level revenue created per unit of carbon emission. Results showed that firm-level carbon productivity increased significantly under the ETS, and such a trend was more evident for high-emission industries. We also found that companies with high carbon productivity were (1) profitable, (2) innovative, and (3) managed by CEOs with experience in environmental fields. These findings suggest that to achieve the conflicting goals of increasing corporate profits while reducing emissions, firms have to invest in green technologies, and such decisions are supported by green leadership. Our findings also have implications for corporate leadership; data highlight the importance of managing human resources and deploying investment policies to respond to ETS.

Do environmental policy and innovation improve carbon productivity? Evidence from the Korean Emission Trading Scheme

2021 ◽  
pp. 0958305X2110645
Author(s):  
Jung Youn Mo
Keyword(s):  
Environmental Policy ◽  
Environmental Performance ◽  
Panel Data Analysis ◽  
Emission Trading ◽  
Emission Trading Scheme ◽  
Factors Affecting ◽  
Frontier Analysis ◽  
Trading Scheme ◽  
Carbon Productivity ◽  
D Investment

This study investigates the relationship among technology innovation, emission trading schemes, and carbon productivity based on data from firms participating in the Korean Emission Trading Scheme. First, the total factor carbon productivity based on stochastic frontier analysis is estimated by industry and it is confirmed that changes in carbon productivity vary by industry. Based on the estimated carbon productivity, panel data analysis is conducted to determine the effects of innovation and environmental policy on carbon productivity. The results show that R&D investment and environmental policy play an important role in promoting carbon productivity. In this study, the factors affecting carbon productivity are also analyzed by industry. Comparative analysis across industries confirms that factors affecting environmental performance vary by industry. Innovation does not significantly affect carbon productivity in assembling industries, but in the process industry, R&D investment plays an important role in increasing environmental performance.

The evolution of China’s emission trading mechanisms: From international offset market to domestic Emission Trading Scheme

2018 ◽  
Vol 36 (7) ◽  
pp. 1214-1233 ◽  
Author(s):  
Feng Ba ◽  
Paul R Thiers ◽  
Yonggong Liu
Keyword(s):  
Clean Development Mechanism ◽  
Emission Trading ◽  
Policy Instruments ◽  
Emission Trading Scheme ◽  
Cap And Trade ◽  
High Emission ◽  
Trading Mechanisms ◽  
Trading Scheme ◽  
New Policies ◽  
Development Mechanism

With the decline of the international market under the Clean Development Mechanism, China is establishing a national Emission Trading Scheme by setting up emission cap and trade rules for high emission industries in seven pilot areas. The shift from the international to domestic market and from an offset program to a true cap and trade mechanism requires several significant changes. This paper reviews the development and evolution of China’s carbon trading market policy instruments. We find that there are substantial changes in both structure and policy. First, Emission Trading Scheme is a broad cap-and-trade mechanism with many new stakeholders added to those already involved in China’s Clean Development Mechanism. Second, the administrative structure is decentralized compared to that of the Clean Development Mechanism. Third, while the Emission Trading Scheme is best thought of as a new policy, China’s experience with the Clean Development Mechanism influences that policy. A large number of Clean Development Mechanism projects are being converted into offsets for the national Emission Trading Scheme market, and many institutional stakeholders that emerged during the Clean Development Mechanism are now involved in the Emission Trading Scheme. The combination of new policies and stakeholders, a decentralization of structure and the conversion of Clean Development Mechanism projects raise questions regarding the integrity of the cap and the enforcement of compliance as the Emission Trading Scheme is expanded into a nationwide system.

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.

Determinants of firm-level energy productivity – Evidence from the Korean emission trading scheme

2021 ◽  
pp. 0958305X2110292
Author(s):  
Jung Youn Mo ◽  
Wooyoung Jeon
Keyword(s):  
Environmental Policy ◽  
Panel Data Analysis ◽  
Emission Trading ◽  
Innovation Activity ◽  
Level Energy ◽  
Emission Trading Scheme ◽  
Energy Productivity ◽  
Firm Level ◽  
Frontier Analysis ◽  
Trading Scheme

With increasing global pressure on transition to carbon neutrality, various technical and policy efforts such as emission trading scheme and carbon tax are being made to improve energy productivity. Yet, there are not many literatures that analyze determinants of firm-level energy productivity, which is an important issue as energy use in industry accounts for one fourth of global carbon emission. This study investigates factors affecting energy productivity such as technology innovation, environmental policy and energy price based on firm-level data from the Korean Emission Trading Scheme (KETS). The total factor energy productivity is estimated by industry based on stochastic frontier analysis (SFA) and panel data analysis is performed to identify determinants of firm-level energy productivity. The results show that energy productivity in Korea has been improved since 2016, and technical progress and environmental policy play an important role in promoting energy productivity. In addition, analysis identifying industry-specific characteristics is performed as their production process and energy consumptions structures vary. The result shows that innovation activity does not significantly affect energy productivity in process industries, but it does in the assembling and high technology industries. This paper implies that policy design reflecting industry-specific characteristics is important to improve energy efficiency more effectively.

The impacts of emission trading scheme on China’s thermal power industry: A pre-evaluation from the micro level

2019 ◽  
Vol 31 (6) ◽  
pp. 1007-1030
Author(s):  
Bingxin Zeng ◽  
Jun Xie ◽  
Xiaobing Zhang ◽  
Yang Yu ◽  
Lei Zhu
Keyword(s):  
Power Plants ◽  
Thermal Power ◽  
Emission Trading ◽  
Power Industry ◽  
Thermal Power Plants ◽  
Emission Trading Scheme ◽  
Trading System ◽  
Firm Level ◽  
Trading Scheme ◽  
Carbon Emission Trading

Emission trading scheme is known as a cost-effective measure for mitigating CO2 emissions, and recently, China has started the world's largest carbon trading system. As the most influential industry in determining China's overall CO2 emission level, the thermal power industry will be greatly affected by nationwide carbon market in the near future. This paper explores the impact of the upcoming national emission trading scheme on China's thermal power industry at firm level. First, based on empirical data of 478 thermal power plants, an empirical analytical framework of micro-firm level is constructed. Then, two kinds of policy scenarios, including no carbon emission trading and national emission trading scheme, in two different market structures have been analyzed. The results show that emission trading scheme have positive impacts on reduction of CO2 emissions among China’s power plants and can reduce the total abatement costs by 0.37%–41.5%. Furthermore, most of the thermal power plants are emissions permits buyers including all the low-emission gas-fired power plants. Additionally, compared with the perfect competition market, more than 70% of thermal power plants increase their total abatement costs in imperfect competition market. These findings provide reference for promoting the development of nationwide carbon emission trading system in China.

scholarly journals Does Emission Trading Boost Carbon Productivity? Evidence from China’s Pilot Emission Trading Scheme

2020 ◽  
Vol 17 (15) ◽  
pp. 5522 ◽  
Author(s):  
Di Zhou ◽  
Xiaoyu Liang ◽  
Ye Zhou ◽  
Kai Tang
Keyword(s):  
Carbon Emissions ◽  
Capital Investment ◽  
Building Materials ◽  
Emission Trading ◽  
Economic Transformation ◽  
Policy Implications ◽  
Difference In Difference ◽  
Trading Scheme ◽  
The Impact ◽  
Carbon Productivity

As the country with the largest carbon emissions globally, the effective operation of China’s carbon emissions trading scheme (ETS) is of great importance to the global community in terms of mitigating climate change. This paper considers China’s pilot ETS launched in 2013 as a quasi-natural experiment. Exploring provincial industrial-level data that are more in line with the ETS coverage, the difference-in-difference-in-difference (DDD) model is used to evaluate the impact of the ETS on carbon productivity. Considering different pilot regions and industries, we also analyze the heterogeneous effect of ETS. Moreover, the mediating effects of technical progress and capital investment are explored. We find that China’s pilot ETS boosted carbon productivity. Among pilot regions, the best policy effectiveness appeared in Beijing, while the weakest effectiveness appeared in Chongqing. Among the pilot industries, the pilot ETS had better effectiveness in petrochemical and electric power industries and weaker effectiveness in building materials and transportation industries. Additionally, the pilot ETS promoted carbon productivity through both technological progress and capital investment, and the former contributed more. Our findings can provide empirical references and policy implications for nationwide implementation of ETS to further promote low-carbon economic transformation.

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