Environmental and economic effects of China's carbon market pilots: Empirical evidence based on a DID model

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This paper investigates whether the China ETS policy has achieved carbon emission reduction at the expense of economic development. Moreover, we are interested in unmasking the role of the institutional factors adopted by the ETS pilots in their ETS effects. Using the province-level panel data during the 2008–2016 period. we employ the DID model to compare carbon emissions and economic development between the ETS and non-ETS regions and between the pre- and post-ETS periods. Some novel empirical findings emerge. First, compared with the non-ETS areas, the ETS policy has significantly reduced carbon emission in the ETS areas. This emission reduction has not come at the cost of economic development. Second, the ETS policy leads to a decline in carbon intensity and fossil fuel energy consumption relative to all energy types. Lastly, some heterogeneity across markets arise. The Beijing carbon market performs the best among all pilots in terms of achieving targets of carbon reductions, followed by the Hubei carbon market.






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Qi, S, S Cheng and J Cui (2021). Environmental and economic effects of China's carbon market pilots: Empirical evidence based on a DID model. Journal of Cleaner Production, 279. pp. 123720–123720. 10.1016/j.jclepro.2020.123720 Retrieved from https://hdl.handle.net/10161/24200.

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Jingbo Cui

Associate Professor of Applied Economics at Duke Kunshan University

Bio: Dr. Jingbo Cui is an Associate Professor of Applied Economics at the Division of Social Sciences and Environmental Research Center at Duke Kunshan University. Before the current position, he was a Chu-Tian Junior Scholar from the Department of Education in Hubei Province, an associate professor at the School of Economics and Management at Wuhan University, a post-doctoral research associate, and visiting scholar at Iowa State University. He holds a Ph.D. in economics from Iowa State University, an M.S. in economics from Wuhan University, and a B.S. in economics and mathematics from Huazhong University of Science and Technology, China. Dr. Cui’s research centers on Environmental Economics, Economics of Innovation, and International Trade. His research has appeared in top academic journals in the fields of Environmental and Resource Economics and Energy Economics, such as Proceedings of the National Academy of Sciences (PNAS), American Economic Review Papers and ProceedingsJournal of Environmental Economics and ManagementAmerican Journal of Agricultural Economics, Environmental and Resource Economics, Journal of Regional Science, China Economic ReviewThe World Economy, Energy Economics, and Energy Policy. He has been serving as the referee for leading journals in Environmental Economics, Agricultural Economics, and Economics of Innovation (i.e., JEEM, AJAE, JAERE, Nature Climate Change, and Research Policy). His research projects have been funded by the National Natural Science Foundation of China (General Program, Junior Program, and Urgent Program), Jiangsu Qinglan Project, and Kunshan Municipal Fund.

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