AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Carbon Pricing Induces Innovation: Evidence from China's Regional Carbon Market Pilots
AEA Papers and Proceedings
vol. 108,
May 2018
(pp. 453–57)
Abstract
China has launched seven regional pilots of emission trading scheme (ETS) to limit its carbon emissions. Taking advantage of the variations in the regional ETS pilots across regions and sectors and over time, we employ a difference-in-difference-in-differences (DDD) approach to evaluate the effect of ETS on low-carbon innovation at the firm level. Using patent application data of publicly-listed firms in China between 2003 and 2015, we find that the ETS pilots induced innovation in low-carbon technologies. The more active pilots—measured by carbon price and turnover rate of allowance trading—are associated with more intense low-carbon innovation.Citation
Cui, Jingbo, Junjie Zhang, and Yang Zheng. 2018. "Carbon Pricing Induces Innovation: Evidence from China's Regional Carbon Market Pilots." AEA Papers and Proceedings, 108: 453–57. DOI: 10.1257/pandp.20181027Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O31 Innovation and Invention: Processes and Incentives
- O34 Intellectual Property and Intellectual Capital
- P28 Socialist Systems and Transitional Economies: Natural Resources; Energy; Environment
- P31 Socialist Enterprises and Their Transitions
- Q52 Pollution Control Adoption and Costs; Distributional Effects; Employment Effects