Has China’s Emission Trading System Achieved the Development of a Low-Carbon Economy in High-Emission Industrial Subsectors?
Open accessAbstract
An emission trading system (ETS) is a powerful emission reduction tool for achieving low-carbon economic development in the world. Focusing on the industrial subsectors, this paper comprehensively analyzes the environmental and economic effects of the pilot ETS in China from the perspectives of economic development, technological optimization, and innovation-driven development by using the propensity score matching–difference in differences (PSM-DID) model based on 2005–2017 provincial panel data. This paper compensates for the limitations of existing studies on the effects of ETS on different subsectors; furthermore, the triple difference model (DDD) model is used to discuss the impacts of differences in environmental responsibility and economic potential among subsectors on policy effects. The empirical results show that: (1) The pilot ETS produces a 14.5% carbon reduction effect on the covered subsectors while reducing GDP by 4.8% without achieving a low-carbon economy. Thus, production decline is the main reason for carbon emission reductions. (2) Economic development factors have significant positive impacts on carbon emissions, while technological optimization and innovation-driven development are key factors for achieving reductions in carbon emissions. (3) The pilot ETS produces a 60.1% carbon emission inhibition effect and 23.2% GDP inhibition effect on the subsectors with greater environmental responsibility. Therefore, the Chinese government should fully simulate the impact of technological innovation and utilize resource endowment differences in the environmental and economic aspects of different sectors to achieve low-carbon economic development.
Integrity signals
Registry
Cites
Statistics
Claims the paper makes
Claims other papers make about this one
Each is checked against this paper’s own text: does it say what the citing paper says it does?
The Shanghai pilot carbon market changed from completely free allocation to the partially paid allocation with a 1% ~ 7% proportion being auctioned, depending on the compliance status.
“For example, the Shanghai pilot carbon market changed from completely free allocation to the partially paid allocation with a 1% ~ 7% 13 proportion being auctioned, depending on the compliance status.”
From The first compliance cycle of China's National Emissions Trading Scheme: insights and implications (2022) · cites this paper as [13]
Cites
Porter, M. E. (1991) · Scientific American · doi:10.1038/scientificamerican0491-168 · Cited by 1,540 · see citing works
Walley, N., & Whitehead, B. W. (1994) · Harvard business review · Cited by 1,428 · see citing works
Natural and Quasi-Experiments in Economics
Meyer, B. D. (1995) · Journal of Business & Economic Statistics · doi:10.1080/07350015.1995.10524589 · Cited by 1,100 · see citing works
Can environmental innovation facilitate carbon emissions reduction? Evidence from China
Zhang, Y., Peng, Y.-L., Ma, C., & Shen, B. (2016) · Energy Policy · doi:10.1016/j.enpol.2016.10.005 · Cited by 866 · see citing works
China׳s carbon-emissions trading: Overview, challenges and future
Liu, L., Chen, C., Zhao, Y., & Zhao, E. (2015) · Renewable and Sustainable Energy Reviews · doi:10.1016/j.rser.2015.04.076 · Cited by 545 · see citing works
The dynamic links between CO2 emissions, economic growth and coal consumption in China and India
Chandran, V., & Tang, C. F. (2012) · Applied Energy · doi:10.1016/j.apenergy.2012.10.042 · Cited by 498 · see citing works
Wang, H., Chen, Z., Wu, X., & Nie, X. (2019) · Energy Policy · doi:10.1016/j.enpol.2019.03.007 · Cited by 450 · see citing works
Cui, L., Fan, Y., Zhu, L., & Qing-hua, B. (2014) · Applied Energy · doi:10.1016/j.apenergy.2014.05.021 · Cited by 335 · see citing works
Can a carbon emission trading scheme generate the Porter effect? Evidence from pilot areas in China
Dong, F., Dai, Y., Zhang, S., Zhang, X., & Long, R. (2018) · The Science of The Total Environment · doi:10.1016/j.scitotenv.2018.10.395 · Cited by 318 · see citing works
Emissions trading in China: Progress and prospects
Zhang, D., Karplus, V. J., Cassisa, C., & Zhang, X. (2014) · Energy Policy · doi:10.1016/j.enpol.2014.01.022 · Cited by 276 · see citing works
Assessing the Policy gaps for achieving China’s climate targets in the Paris Agreement
Gallagher, K. S., Zhang, F., Orvis, R., Rissman, J., & Liu, Q. (2019) · Nature Communications · doi:10.1038/s41467-019-09159-0 · Cited by 221 · see citing works
Zhang, Y., Shi, W., & Lin, J. (2019) · Business Strategy and the Environment · doi:10.1002/bse.2404 · Cited by 208 · see citing works
Liu, Y., Tan, X., Yu, Y., & Qi, S. (2016) · Applied Energy · doi:10.1016/j.apenergy.2016.05.085 · Cited by 208 · see citing works
Zhu, B., Zhang, M., Huang, L., Wang, P., Su, B., & Wei, Y. (2019) · Energy Economics · doi:10.1016/j.eneco.2019.104601 · Cited by 200 · see citing works
Zhang, Y.-J., Liang, T., Jin, Y.-L., & Shen, B. (2020) · Applied Energy · doi:10.1016/j.apenergy.2019.114290 · Cited by 194 · see citing works
Zhang, H., Duan, M., & Deng, Z. (2019) · Journal of Cleaner Production · doi:10.1016/j.jclepro.2019.06.247 · Cited by 192 · see citing works
Self-citationAssessing the design of three carbon trading pilot programs in China
Munnings, C., Morgenstern, R. D., Wang, Z., & Liu, X. (2016) · Energy Policy · doi:10.1016/j.enpol.2016.06.015 · Cited by 177 · see citing works
The impact of wind farm visibility on property values: A spatial difference-in-differences analysis
Sunak, Y., & Madlener, R. (2016) · Energy Economics · doi:10.1016/j.eneco.2015.12.025 · Cited by 169 · see citing works
Zhang, W., Zhang, N., & Yu, Y. (2019) · Technological Forecasting and Social Change · doi:10.1016/j.techfore.2018.12.014 · Cited by 157 · see citing works
Modelling of carbon price in two real carbon trading markets
Yan, H., Tian, C., & Wu, C. (2019) · Journal of Cleaner Production · doi:10.1016/j.jclepro.2019.118556 · Cited by 151 · see citing works
Han, R., Tang, B.-J., Fan, J., Liu, L.-C., & Wei, Y. (2016) · Journal of Cleaner Production · doi:10.1016/j.jclepro.2016.05.001 · Cited by 98 · see citing works
Environmental policies and productivity growth
Kozluk, T. J., & Zipperer, V. (2014) · OECD Journal Economic Studies · doi:10.1787/eco_studies-2014-5jz2drqml75j · Cited by 97 · see citing works
Low carbon growth in China: The role of emissions trading in a transitioning economy
Springer, C., Evans, S., Lin, J., & Roland-Holst, D. W. (2018) · Applied Energy · doi:10.1016/j.apenergy.2018.11.046 · Cited by 88 · see citing works
Zhang, H., & Duan, M. (2020) · Journal of Environmental Management · doi:10.1016/j.jenvman.2019.109997 · Cited by 77 · see citing works
Self-citationCarbon pricing and system linking: Lessons from the New Zealand Emissions Trading Scheme
Diaz‐Rainey, I., & Tulloch, D. J. (2018) · Energy Economics · doi:10.1016/j.eneco.2018.04.035 · Cited by 76 · see citing works
Analysis of regional carbon allocation and carbon trading based on net primary productivity in China
Wu, Y., Wang, P., Liu, X., Chen, J., & Song, M. (2019) · China Economic Review · doi:10.1016/j.chieco.2019.101401 · Cited by 72 · see citing works
Zhang, Z., Cai, W., & Feng, X. (2017) · Energy Policy · doi:10.1016/j.enpol.2017.02.025 · Cited by 69 · see citing works
Anatomy of Emissions Trading Systems: What is the EU ETS?
Verbruggen, A., Laes, E., & Woerdman, E. (2019) · Environmental Science & Policy · doi:10.1016/j.envsci.2019.05.001 · Cited by 68 · see citing works
Zhang, Y., & Liu, J.-Y. (2018) · Natural Hazards · doi:10.1007/s11069-018-3434-5 · Cited by 65 · see citing works
Duan, M., Tian, Z., Yongqiang, Z., & Li, M. (2017) · Energy Research & Social Science · doi:10.1016/j.erss.2017.09.008 · Cited by 64 · see citing works
Fan, X., Li, X., Yin, J., Tian, L., & Liang, J. (2018) · Applied Energy · doi:10.1016/j.apenergy.2018.11.007 · Cited by 62 · see citing works
Regional impacts of launching national carbon emissions trading market: A case study of Shanghai
Liu, Z., Geng, Y., Dai, H., Wilson, J., Xie, Y., Wu, R., You, W., & Yu, Z. (2018) · Applied Energy · doi:10.1016/j.apenergy.2018.08.117 · Cited by 58 · see citing works
Wang, X., Zhu, L., & Fan, Y. (2018) · Applied Energy · doi:10.1016/j.apenergy.2018.03.080 · Cited by 55 · see citing works
On the road to China's 2020 carbon intensity target from the perspective of “double control”
Zhu, B., Jiang, M., Wang, K., Chevallier, J., Wang, P. Q., & Wei, Y. (2018) · Energy Policy · doi:10.1016/j.enpol.2018.04.025 · Cited by 51 · see citing works
Nation-wide emission trading model for economically feasible carbon reduction in Japan
Nguyen, D. H., Chapman, A. J., & Farabi‐Asl, H. (2019) · Applied Energy · doi:10.1016/j.apenergy.2019.113869 · Cited by 51 · see citing works
Panel Data Approach vs. Synthetic Control MethodPreprint
Wan, S. K., Xie, Y., & Hsiao, C. (2017) · SSRN Electronic Journal · doi:10.2139/ssrn.3076068 · Cited by 49 · see citing works
Optimization analysis of carbon emission rights allocation based on energy justice—The case of China
Fang, G., Liu, M., Tian, L., Fu, M., & Zhang, Y. (2018) · Journal of Cleaner Production · doi:10.1016/j.jclepro.2018.08.187 · Cited by 46 · see citing works
Do Environmental Policies Matter for Productivity Growth?
Albrizio, S., Botta, E., Kozluk, T. J., & Zipperer, V. (2014) · OECD Economics Department working papers · doi:10.1787/5jxrjncjrcxp-en · Cited by 43 · see citing works
An assessment of a proposed ETS in Australia by using the MONASH-Green model
Nong, D., Meng, S., & Siriwardana, M. (2017) · Energy Policy · doi:10.1016/j.enpol.2017.06.004 · Cited by 37 · see citing works
Dai, Y., Li, N., Gu, R., & Zhu, X. (2018) · Sustainability · doi:10.3390/su10072421 · Cited by 37 · see citing works
Carbon Emission Trading in South African Construction Industry
Oke, A. E., Aigbavboa, C. O., & Dlamini, S. A. (2017) · Energy Procedia · doi:10.1016/j.egypro.2017.12.169 · Cited by 29 · see citing works
The Potential Gains from Carbon Emissions Trading in China’s Industrial Sectors
Yu, Y., Zhang, W., & Zhang, N. (2017) · Computational Economics · doi:10.1007/s10614-017-9724-2 · Cited by 23 · see citing works
Locke, C. M., Butsic, V., & Rissman, A. R. (2017) · Land Use Policy · doi:10.1016/j.landusepol.2017.03.019 · Cited by 21 · see citing works
Analysis of the Relationship between China’s IPPU CO2 Emissions and the Industrial Economic Growth
Duan, Y., Mu, H., & Li, N. (2016) · Sustainability · doi:10.3390/su8050426 · Cited by 21 · see citing works
Zhang, H., Zhang, R., Li, G., Li, W., & Choi, Y. (2019) · Sustainability · doi:10.3390/su11236869 · Cited by 18 · see citing works
Self-citationZhou, J., Li, Y., Huo, X., & Xu, X. (2019) · Sustainability · doi:10.3390/su11030914 · Cited by 18 · see citing works
Research on the initial allocation of carbon emission quotas: evidence from China
Hu, Y., Han, R., & Tang, B.-J. (2016) · Natural Hazards · doi:10.1007/s11069-016-2628-y · Cited by 17 · see citing works
Flagged first, then by citations
2 of the 49 references couldn’t be matched to a known paper.
Cited by
Sorted by citations
Zhang, Z., Hu, G., Mu, X., & Kong, L. (2022) · Journal of Environmental Management · doi:10.1016/j.jenvman.2022.116087 · Cited by 227 · see citing works
Wang, X., Huang, J., & Liu, H. (2022) · Journal of Environmental Management · doi:10.1016/j.jenvman.2021.114357 · Cited by 210 · see citing works
Yadav, S., Samadhiya, A., Kumar, A., V, Majumdar, A., Garza‐Reyes, J. A., & Luthra, S. (2023) · Resources Conservation and Recycling · doi:10.1016/j.resconrec.2023.107094 · Cited by 154 · see citing works
Feng, Y., Wang, X., Liang, Z., Hu, S., Xie, Y., & Wu, G. (2021) · Journal of Cleaner Production · doi:10.1016/j.jclepro.2021.126262 · Cited by 137 · see citing works
Toward the carbon neutrality: Forest carbon sinks and its spatial spillover effect in China
Zhao, N., Wang, K., & Yuan, Y. (2023) · Ecological Economics · doi:10.1016/j.ecolecon.2023.107837 · Cited by 66 · see citing works
Effects of emission trading scheme (ETS) on change rate of carbon emission
Jung, H., & Song, C. (2023) · Scientific Reports · doi:10.1038/s41598-023-28154-6 · Cited by 64 · see citing works
Czyżewski, B., Polcyn, J., & Brelik, A. (2021) · Environmental Science & Policy · doi:10.1016/j.envsci.2021.11.001 · Cited by 39 · see citing works
Zhang, H., & Liu, Y. (2022) · Journal of Cleaner Production · doi:10.1016/j.jclepro.2022.132629 · Cited by 39 · see citing works
Self-citationTao, M., Failler, P., Goh, L. T., Lau, W., Dong, H., & Xie, L. (2022) · Mitigation and Adaptation Strategies for Global Change · doi:10.1007/s11027-022-10015-8 · Cited by 32 · see citing works
Li, N., Shi, B., Wu, L., Kang, R., & Gao, Q. (2022) · Frontiers in Environmental Science · doi:10.3389/fenvs.2021.778254 · Cited by 31 · see citing works
The first compliance cycle of China's National Emissions Trading Scheme: insights and implications
Li, J., Yao, Y., & Wang, X. (2022) · Carbon Neutrality · doi:10.1007/s43979-022-00035-3 · Cited by 25 · see citing works
Zhang, H., Tan, X., Liu, Y., & He, C. (2023) · Journal of Environmental Management · doi:10.1016/j.jenvman.2023.119155 · Cited by 20 · see citing works
Self-citationLiu, J., Xu, F., & Lv, Y. (2024) · Ecological Indicators · doi:10.1016/j.ecolind.2024.111865 · Cited by 18 · see citing works
Has China’s pilot emission trading system promoted technological progress in industrial subsectors?
Zhang, H., Liu, Y., Choi, Y., Yang, L., & Li, X. (2022) · Environmental Research Letters · doi:10.1088/1748-9326/ac9e0c · Cited by 13 · see citing works
Self-citationHow Does Public Transportation Influence Hotel Demand? Evidence From a Natural Experiment
Zheng, W., Gao, S., & Fang, B. (2022) · International Journal of Hospitality Management · doi:10.1016/j.ijhm.2022.103338 · Cited by 10 · see citing works
Zheng, Y., Zhan, J., Wang, C., Twumasi-Ankrah, M. J., Zhang, H., & Peng, X. (2025) · Sustainable Cities and Society · doi:10.1016/j.scs.2025.106916 · Cited by 7 · see citing works
Self-citation[Retracted] Influence of China’s Carbon Emissions Trading Scheme on Green Innovation of Enterprises
Qi, Y., Zha, L., Peng, W., & Deng, Z. (2022) · Journal of Environmental and Public Health · doi:10.1155/2022/3109561 · Cited by 6 · see citing works
RetractedWang, J., & Hao, S. (2023) · Environmental Geochemistry and Health · doi:10.1007/s10653-023-01601-z · Cited by 6 · see citing works
Bai, S., Zhou, J., Yang, M., Yang, Z., & Cui, Y. (2023) · Frontiers in Public Health · doi:10.3389/fpubh.2023.1181623 · Cited by 5 · see citing works
Zhang, L., Luo, J., Wu, Z., & Li, Y. (2024) · Clean Technologies and Environmental Policy · doi:10.1007/s10098-024-02817-y · Cited by 4 · see citing works
Under what conditions and why is carbon pricing effective? A realist synthesis of ex-post evidence
Döbbeling-Hildebrandt, N., Danilenko, D., Lamb, W. F., & Minx, J. C. (2025) · Environmental Research Letters · doi:10.1088/1748-9326/ae03d8 · Cited by 3 · see citing works
(2024) · Journal of Logistics Informatics and Service Science · doi:10.33168/jliss.2024.1027 · Cited by 2 · see citing works
Czyżewski, B., Guth, M., Matuszczak, A., Smędzik-Ambroży, K., & Stępień, S. (2025) · International Journal of Emerging Markets · doi:10.1108/ijoem-04-2025-0702
Liwen, 刘. L., Yang, Y., & Wang, Q. (2026) · Energies · doi:10.3390/en19215150
- Authors
- Zhang, H., Zhang, R., Li, G., Li, W., & Choi, Y.
- Affiliations
- Taiyuan University of Technology (CN)
- Inha University (KR)
- Corresponding author
- Li, Wei
- Choi, Yongrok
- Venue
- Sustainability
- Publisher
- MDPI AG
- Published
- 2020-07-02
- Volume
- 12
- Issue
- 13
- Pages
- 5370
- ISSN
- 2071-1050 (ISSN-L)
- OpenAlex
- W3039614263
- Cited by
- 23
- References
- 49
- Citations by year
- 2026: 1 · 2025: 3 · 2024: 2 · 2023: 6 · 2022: 8 · 2021: 3
- FWCI
- 3.61
- Type
- journal article
- Language
- en
- Open access
- gold
- dx.doi.org
- Licence
- Locations
- Sustainability (publishedVersion, cc-by)
- RePEc: Research Papers in Economics (submittedVersion)
- DOAJ (DOAJ: Directory of Open Access Journals) (submittedVersion, cc-by-sa)
- Funders
- National Natural Science Foundation of China (71373170, 71602136, 11901422)
- National Research Foundation of Korea (NRF-2019R1A2C1005326)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Energy, Environment, Economic Growth
- Physical Sciences › Energy › Renewable Energy, Sustainability and the Environment › Renewable energy and sustainable power systems
- Keywords
- emissions trading, low-carbon economy, industrial sub-sectors, carbon emission reduction, GDP growth, technological innovation, innovation-driven development, environmental responsibility, resource endowment
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
