Research On The Emission Reduction Effect Of China’s ETS

In order to effectively address the growing climate change problem and reduce greenhouse gas emissions,China is building a national carbon emissions trading market to ensure that the climate targets of "peak carbon by 2030 and carbon neutral by 2060" are met.Since 2013,China has started a pilot carbon trading mechanism in some regions to promote some local energy-consuming industries to control their GHG emissions by upgrading emission reduction technologies and improving energy efficiency.However,considering the differences among regions in terms of economic development level,industrial output share,natural resource endowment,etc.,as well as the significant differences in production methods and emission reduction potential of different industries,the emission reduction effect of carbon emission trading mechanism and its realization path may be somewhat different among different regions and different industries.The current empirical studies on the emission reduction effect of emission trading mechanism focus on the assessment of the overall effect but less on the mechanism of its impact and its heterogeneous performance.Therefore,this thesis attempts to identify the paths of emission reduction effect of carbon emission trading mechanism by suitable methods,and on the basis of this,carry out the corresponding heterogeneity analysis at regional and industry levels.Specifically,this thesis combines the classical multi-period propensity matching score-double difference(PSM-DID)model with the log-averaged Diese index decomposition(LMDI)model to assess the impact mechanism of China’s pilot carbon trading mechanism on the emissions of the industrial sectors covered by it.First,this thesis uses the multi-period PSM-DID model to assess the overall impact of the pilot carbon trading mechanism on the emissions of energy-intensive industrial sectors and analyze the dynamic characteristics of its policy impact;then,this thesis uses the multiperiod PSM-DID model to comparatively analyze the impact of the carbon trading mechanism on the carbon emissions of the industries covered by the carbon market in each pilot region based on the decomposition of the factors using LMDI.Finally,on the premise of constructing a multi-period propensity matching allocation-triple difference(PSM-DDD)model to control for regional and industry characteristics,this thesis compares and analyzes the effects of the emissions trading mechanism on various decomposition factors of carbon emissions in different regions or industries to reveal the heterogeneity of the emission reduction effects of the carbon emissions trading mechanism among regions and industries and to explore the underlying causes.Through the above study,this thesis draws the following main conclusions: first,the carbon emission trading mechanism promotes the emission reduction effect of the industries covered by the pilot regions as a whole,and this policy effect is sustainable;Second,the main positive driver of carbon emissions in each pilot region and industry is the level of economic development,and the negative drivers are economic structure and energy intensity,while the emission trading mechanism mainly promotes the achievement of emission reduction targets by optimizing economic structure and reducing the use of fossil energy,and the policy does not inhibit the development of economic level;Third,the emission reduction effect of the emissions trading mechanism varies significantly across regions and industries.The emission reduction effect is most significant in Beijing,while most regions promote emission reduction in the local industrial sector by reducing energy intensity and optimizing economic structure;there are also significant differences in the policy at the industry level,with the petrochemical and chemical industries having the most significant emission reduction effect,and these two industries promoting emission reduction mainly through industrial scale and industrial structure,while the power industry has a less significant emission reduction effect,but has The power industry is not as effective,but has the potential to reduce emissions.Based on the above findings,this thesis puts forward the following policy recommendations.First,accelerate the construction of a national unified carbon emission trading mechanism and include more energy-consuming industries to effectively control and reduce GHG emissions;second,improve the design of the carbon emission trading mechanism and effectively combine it with other emission reduction measures to optimize the energy structure and thus promote the reduction of GHG emissions;third,the carbon emission trading mechanism should focus on regional and industry heterogeneity in the setting of total control targets and quota allocation methods.Third,the carbon emission trading mechanism should focus on regional and industry heterogeneity in the setting of total control targets and allowance allocation methods.