Research on the emission reduction effects of carbon trading mechanism on power industry: plant-level evidence from China
Purpose – Carbon trading mechanism has been adopted to foster the green transformation of the economy on a global scale, but its effectiveness for the power industry remains controversial. Given that energy-related greenhouse gas emissions account for most of all anthropogenic emissions, this paper...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2023-04-01
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| Series: | International Journal of Climate Change Strategies and Management |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/IJCCSM-06-2022-0074/full/pdf |
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| author | Yonghui Han Shuting Tan Chaowei Zhu Yang Liu |
| author_facet | Yonghui Han Shuting Tan Chaowei Zhu Yang Liu |
| author_sort | Yonghui Han |
| collection | DOAJ |
| description | Purpose – Carbon trading mechanism has been adopted to foster the green transformation of the economy on a global scale, but its effectiveness for the power industry remains controversial. Given that energy-related greenhouse gas emissions account for most of all anthropogenic emissions, this paper aims to evaluate the effectiveness of this trading mechanism at the plant level to support relevant decision-making and mechanism design. Design/methodology/approach – This paper constructs a novel spatiotemporal data set by matching satellite-based high-resolution (1 × 1 km) CO2 and PM2.5 emission data with accurate geolocation of power plants. It then applies a difference-in-differences model to analyse the impact of carbon trading mechanism on emission reduction for the power industry in China from 2007 to 2016. Findings – Results suggest that the carbon trading mechanism induces 2.7% of CO2 emission reduction and 6.7% of PM2.5 emission reduction in power plants in pilot areas on average. However, the reduction effect is significant only in coal-fired power plants but not in gas-fired power plants. Besides, the reduction effect is significant for power plants operated with different technologies and is more pronounced for those with outdated production technology, indicating the strong potential for green development of backward power plants. The reduction effect is also more intense for power plants without affiliation relationships than those affiliated with particular manufacturers. Originality/value – This paper identifies the causal relationship between the carbon trading mechanism and emission reduction in the power industry by providing an innovative methodology for identifying plant-level emissions based on high-resolution satellite data, which has been practically absent in previous studies. It serves as a reference for stakeholders involved in detailed policy formulation and execution, including policymakers, power plant managers and green investors. |
| first_indexed | 2024-03-13T01:41:21Z |
| format | Article |
| id | doaj.art-0910e17e5c694619bbf7e4d9652ce629 |
| institution | Directory Open Access Journal |
| issn | 1756-8692 |
| language | English |
| last_indexed | 2024-03-13T01:41:21Z |
| publishDate | 2023-04-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | International Journal of Climate Change Strategies and Management |
| spelling | doaj.art-0910e17e5c694619bbf7e4d9652ce6292023-07-03T13:10:31ZengEmerald PublishingInternational Journal of Climate Change Strategies and Management1756-86922023-04-0115221223110.1108/IJCCSM-06-2022-0074Research on the emission reduction effects of carbon trading mechanism on power industry: plant-level evidence from ChinaYonghui Han0Shuting Tan1Chaowei Zhu2Yang Liu3Guangdong Institute for International Strategies, Guangdong University of Foreign Studies, Guangzhou, ChinaGuangdong Institute for International Strategies, Guangdong University of Foreign Studies, Guangzhou, ChinaFaculty of Business, Economics and Informatics, University of Zurich, Zürich, SwitzerlandGuangdong Institute for International Strategies, Guangdong University of Foreign Studies, Guangzhou, ChinaPurpose – Carbon trading mechanism has been adopted to foster the green transformation of the economy on a global scale, but its effectiveness for the power industry remains controversial. Given that energy-related greenhouse gas emissions account for most of all anthropogenic emissions, this paper aims to evaluate the effectiveness of this trading mechanism at the plant level to support relevant decision-making and mechanism design. Design/methodology/approach – This paper constructs a novel spatiotemporal data set by matching satellite-based high-resolution (1 × 1 km) CO2 and PM2.5 emission data with accurate geolocation of power plants. It then applies a difference-in-differences model to analyse the impact of carbon trading mechanism on emission reduction for the power industry in China from 2007 to 2016. Findings – Results suggest that the carbon trading mechanism induces 2.7% of CO2 emission reduction and 6.7% of PM2.5 emission reduction in power plants in pilot areas on average. However, the reduction effect is significant only in coal-fired power plants but not in gas-fired power plants. Besides, the reduction effect is significant for power plants operated with different technologies and is more pronounced for those with outdated production technology, indicating the strong potential for green development of backward power plants. The reduction effect is also more intense for power plants without affiliation relationships than those affiliated with particular manufacturers. Originality/value – This paper identifies the causal relationship between the carbon trading mechanism and emission reduction in the power industry by providing an innovative methodology for identifying plant-level emissions based on high-resolution satellite data, which has been practically absent in previous studies. It serves as a reference for stakeholders involved in detailed policy formulation and execution, including policymakers, power plant managers and green investors.https://www.emerald.com/insight/content/doi/10.1108/IJCCSM-06-2022-0074/full/pdfEmission reductionCarbon trading mechanismGreen financeSustainable energy |
| spellingShingle | Yonghui Han Shuting Tan Chaowei Zhu Yang Liu Research on the emission reduction effects of carbon trading mechanism on power industry: plant-level evidence from China International Journal of Climate Change Strategies and Management Emission reduction Carbon trading mechanism Green finance Sustainable energy |
| title | Research on the emission reduction effects of carbon trading mechanism on power industry: plant-level evidence from China |
| title_full | Research on the emission reduction effects of carbon trading mechanism on power industry: plant-level evidence from China |
| title_fullStr | Research on the emission reduction effects of carbon trading mechanism on power industry: plant-level evidence from China |
| title_full_unstemmed | Research on the emission reduction effects of carbon trading mechanism on power industry: plant-level evidence from China |
| title_short | Research on the emission reduction effects of carbon trading mechanism on power industry: plant-level evidence from China |
| title_sort | research on the emission reduction effects of carbon trading mechanism on power industry plant level evidence from china |
| topic | Emission reduction Carbon trading mechanism Green finance Sustainable energy |
| url | https://www.emerald.com/insight/content/doi/10.1108/IJCCSM-06-2022-0074/full/pdf |
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