TY - JOUR
T1 - Testing mechanisms through which China's ETS promotes a low-carbon transition
AU - Liu, Feng
AU - van den Bergh, Jeroen
AU - Wei, Yihang
N1 - Publisher Copyright:
© 2024 Elsevier B.V.
PY - 2024/4
Y1 - 2024/4
N2 - China regards an emission trading scheme (ETS) as the most promising approach for reducing its carbon dioxide emissions. However, there are still disagreements about the effectiveness of China's ETS (CETS). To settle this issue, we test the impact of CETS on key mechanisms driving a low-carbon transition. We use the difference-in-difference method to analyze data for coal-power plants participating in China's carbon trading pilot. This involves the use of two variables based on life-cycle indicators, namely ‘energy return on energy invested’ (EROI) and ‘energy return on carbon invested’ (EROC). We obtain three main findings: (1) a mediating effect of supply-side reform is significant; (2) this effect is stronger for more intense technological innovation and government intervention; (3) the influence of CETS on a low-carbon transition is independent of the development of clean energy. Overall, we conclude that the scope of CETS should be extended to other emitters to fully unleash its potential for reducing carbon emissions.
AB - China regards an emission trading scheme (ETS) as the most promising approach for reducing its carbon dioxide emissions. However, there are still disagreements about the effectiveness of China's ETS (CETS). To settle this issue, we test the impact of CETS on key mechanisms driving a low-carbon transition. We use the difference-in-difference method to analyze data for coal-power plants participating in China's carbon trading pilot. This involves the use of two variables based on life-cycle indicators, namely ‘energy return on energy invested’ (EROI) and ‘energy return on carbon invested’ (EROC). We obtain three main findings: (1) a mediating effect of supply-side reform is significant; (2) this effect is stronger for more intense technological innovation and government intervention; (3) the influence of CETS on a low-carbon transition is independent of the development of clean energy. Overall, we conclude that the scope of CETS should be extended to other emitters to fully unleash its potential for reducing carbon emissions.
KW - Carbon pricing
KW - Emission trading
KW - Energy transition
KW - EROC
KW - EROI
KW - Carbon pricing; Emission trading; Energy transition; EROC; EROI
UR - http://www.scopus.com/inward/record.url?scp=85188702872&partnerID=8YFLogxK
UR - https://www.mendeley.com/catalogue/42177863-09fc-318d-8cc5-b2b0fdbd05aa/
UR - https://portalrecerca.uab.cat/en/publications/90ffa38d-a7b8-46f6-b8f9-1c0c8c10cd62
U2 - 10.1016/j.eneco.2024.107494
DO - 10.1016/j.eneco.2024.107494
M3 - Article
AN - SCOPUS:85188702872
SN - 0140-9883
VL - 132
JO - Energy Economics
JF - Energy Economics
M1 - 107494
ER -