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.

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.

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