Testing mechanisms through which China's ETS promotes a low-carbon transition
Liu, Feng (China University of Mining and Technology. School of Economics and Management)
van den Bergh, Jeroen C. J. M. (Universitat Autònoma de Barcelona. Institut de Ciència i Tecnologia Ambientals)
Wei, Yihang (China University of Mining and Technology. School of Economics and Management)

Date:	2024
Abstract:	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.
Grants:	European Commission 741087 Ministerio de Economía y Competitividad MDM-2015-0552
Note:	Unidad de excelencia María de Maeztu CEX2019-000940-M
Rights:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, i la comunicació pública de l'obra, sempre que no sigui amb finalitats comercials, i sempre que es reconegui l'autoria de l'obra original. No es permet la creació d'obres derivades.
Language:	Anglès
Document:	Article ; recerca ; Versió acceptada per publicar
Subject:	Carbon pricing ; Emission trading ; Energy transition ; EROC ; EROI ; SDG 7 - Affordable and Clean Energy
Published in:	Energy Economics, Vol. 132 (April 2024) , art. 107494, ISSN 1873-6181

DOI: 10.1016/j.eneco.2024.107494

Available from: 2026-04-30 Postprint

The record appears in these collections:
Research literature > UAB research groups literature > Research Centres and Groups (research output) > Experimental sciences > Institut de Ciència i Tecnologia Ambientals (ICTA) > Environmental and Climate Economics (ECE)
Articles > Research articles
Articles > Published articles