The Impact of Emissions Trading on Pollution Reduction: Quasi-natural Experimental Analysis Based on Difference-in-differences Model

Abstract

Abstract: In 2007, China launched a pilot policy on emissions trading in eleven provinces of the country, which provided a good quasi-natural experiment for studying the policy impact of emissions trading system on pollutants. Based on China's inter-provincial panel data from 2004 to 2017, this paper uses double differential and other methods to evaluate the effect of the pilot emissions trading policy on binding total pollutant control. The study finds that emissions trading has significant emission reduction effects on three types of binding total pollutants:sulfur dioxide, nitrogen oxygen and chemical oxygen demand, and the environmental impact of emissions trading is not disturbed by sewage charges and "two control zones"; In areas with higher regulatory intensity, emissions trading has a more obvious effect on the emission reduction of three types of pollutants. Hitherto, China's emissions trading pilot policy has achieved good results. It should further expand the scope and subject of transactions, narrow the differences between the level of technological and market development between regions, and speed up the construction of a unified national emissions trading market.

Key words: emissions trading, total control of pollutants, policy effects, heterogeneity environmental effects, Difference-in-Differences

Si Lijuan, Cao Haoyu. The Impact of Emissions Trading on Pollution Reduction: Quasi-natural Experimental Analysis Based on Difference-in-differences Model[J]. Management Review, 2020, 32(12): 15-26.

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