Emissions Trading Systems, Structure Adjustment and Air Pollution Reduction: Evidence from Enterprises in China

Using a Chinese-city-piloted emissions trading system (ETS)’s survey data, this study provides nationwide causal estimates of the reduction effects of the implementation of an ETS on air pollution (AP) at the enterprise level. We employ a multiperiod difference-in-differences model to control for po...

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Bibliographic Details
Published in:Sustainability 2023-04, Vol.15 (7), p.6158
Main Authors: Lyu, Chaofeng, Deng, Shuxin, Dai, Zewei
Format: Article
Language:English
Subjects:
Air pollution
Air pollution control
Air quality management
Analysis
Carbon
Cities
Climate change
Developing countries
Emission standards
Emissions control
Emissions credit trading
Emissions trading
Emitters
Environmental policy
Environmental regulations
Free enterprise
Heterogeneity
LDCs
Outdoor air quality
Pollutants
Regulation
Sewage
Surveys
Sustainable development
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Summary:Using a Chinese-city-piloted emissions trading system (ETS)’s survey data, this study provides nationwide causal estimates of the reduction effects of the implementation of an ETS on air pollution (AP) at the enterprise level. We employ a multiperiod difference-in-differences model to control for potential endogenous problems. The results indicate that the implementation of an ETS significantly reduces the AP of enterprises in pilot areas by 6.96%, and that the effect has a dynamic effect. Heterogeneity analyses show that the emissions reduction effect of an ETS will differ for various enterprises. In terms of region, the implementation of an ETS significantly reduces the AP of eastern, central, and western enterprises by 11.46%, 5.31%, and 12.37%, respectively; in terms of scale, small- and medium-sized enterprises benefit the most (7.69%), followed by large enterprises (1.73%); and in terms of ownership, private enterprises achieve a 7.27% reduction in AP. Additionally, we find that the AP reduction effect is realized by the adjustment of enterprises’ energy and production structures rather than by adding air sewage equipment. Overall, since China is the largest AP emitter worldwide, this study will not only have important implications for sustainable development in China but also the world, providing a scientific basis for starting pilot policies in other developing countries.
ISSN:2071-1050
2071-1050
DOI:10.3390/su15076158