Low-carbon innovation induced by emissions trading in China.
other
Where this comes from
- Record sourced from PubMed, PMID 31501437.
- Also identified by DOI 10.1038/s41467-019-12213-6 and PMC identifier 6733790.
- Licence recorded as CC BY.
- The licence permits redistribution, so the abstract is shown in full and the full text is available from the publisher.
Abstract
Emissions trading scheme (ETS) has been adopted by an increasing number of countries and regions for carbon mitigation, but its actual effect depends on specific program design and institutional context. Before launching the world largest ETS, China experimented with seven independent regional pilots, whose effects are only indirectly explored. Here we provide firm-level evidence of the innovation effect directly from China's pilot emissions trading, based on latest patenting information and a quasi-experimental design. China's pilots increase low-carbon innovation of ETS firms by 5-10% without crowding out their other technology innovation. The increase from ETS firms accounts for about 1% increase of the regional low-carbon patents, while a similar increase from large non-ETS firms is also induced by the ETS. Most importantly, the effect is not associated with permit price, auction, or firm characteristics, but is driven by mass-based allowance allocation. A rate-based approach, however, is adopted by China's national market.