The Effectiveness Assessment Of China’s Carbon Emission Trading Trail Policy

The increasing greenhouse gas emission has posed great threat to the sustainable development of human society,economics and environment.Since the Kyoto Protocol went into effect in 2005,the market-oriented Carbon Emission Trading System has become the most recognized emission reduction approach worldwide.Its fundamental principal is to internalize the external effect exerted by carbon emission,trying to minimize the emission cost under the condition of achieving overall emission reduction task.Treading on the heels of EU and other new emerging countries,China approved the green proposal that carrying on regional carbon trading system as a trail in 2011.It is believed that the effectiveness assessment of China’s Carbon Emission Trading Trail Policy is of fundamental significance for the future implementation of improving exist trading system and building nationwide trading system.This paper is aim to evaluate the effects of the policy on both environmental and economic dimensions by processing the panel data of 30 provinces from 1998 to 2014 with PSM-DID model.The calculation of provincial carbon emission is based on 17 type of terminal energy consumption and 2 types of semi-convertible energies.It is found that under DID model,the trail trading system has exerted positive influence on carbon emission reduction.The overall net effect is around 14.84% with a growing trend among 2012~2014,which proves a growing effectiveness of the policy.As for the effect on economy,generally it remains positive but only significant in 2014.Furture more,it is tested that the “positive effects” is not resulted from the technology improvement led by the trading system,probably from the “window profits” brought by free allowance.Besides,PSM-DID robustness check has certified the validity of the results above.