Research on the Impact of Carbon Emissions Trading on Green Technology Innovation

• In Event: Data Centers, Grid Infrastructure, and Energy Investment

Abstract

Environmental problems have increasingly become a key factor restricting the sustainable development of the global economy, and green technology innovation is the fundamental focus of balancing economic growth and environmental protection in the low-carbon era. As a typical practice of using Coase theorem to solve the problem of environmental externalities, carbon emissions trading has been concerned. This study investigates the green technological innovation effect of carbon emissions trading from both theoretical and empirical dimensions. Theoretically, focusing on the production and business activities of emission-controlled enterprises, this study conducts theoretical modeling by maximizing the profit function and deduces hypotheses by comparing the optimal green technology innovation input of enterprises under different scenarios. Empirically, taking the pilot project of China’s carbon emissions trading policy as a quasi-natural experiment, this study makes an empirical analysis on the data about 30 provinces from 2007 to 2022 and employs the methods of multi-period DID, synthetic control DID and spatial DID. It is found that the implementation of carbon emissions trading policy can significantly promote green technology innovation in pilot areas, and has a greater role in promoting green invention patents. Further analysis shows that both R&D personnel input mechanism and technology trading activity mechanism play a positive role, and the latter contributes more. From the perspective of spatial effect, the impact of carbon emissions trading on green technology innovation has a positive spatial spillover. In addition, the realization of green technological innovation effect of carbon emissions trading is affected by the factors of carbon market self-construction, such as quota allocation mode, emission control unit identification standard, punishment for non-performing enterprises and carbon price. From the perspective of differentiated institutional design, the quota allocation mechanism combining free allocation and paid sales, the identification criteria for emission-controlled entities based on both annual greenhouse gas (GHG) emissions (e.g., carbon dioxide) and annual comprehensive energy consumption, low penalty intensity, and a high carbon price are more conducive to realizing the green technological innovation effect of carbon emissions trading policy. The above conclusions can provide empirical evidence and practical guidance for evaluating the policy effects of carbon emissions trading and releasing the technological innovation potential of the carbon market, and comprehensively contribute to the construction of ecological civilization and high-quality economic development.

Authors

• Xiaoya Liu, Southeast University
  Presenting Author

• Ying Zhang, Southeast University
  Non-Presenting Co-Author