Low-carbon innovation induced by emissions trading in China

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…

• NN
  National Natural Science Foundation of China

  Award: 71704092
• TU
  Tsinghua University

  Awards: 2017THZWYY08, 17ZDA077
• NO
  National Office for Philosophy and Social Sciences

  Award: 17ZDA077
• TI
  Tsinghua Initiative Scientific Research Program