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Carbon emission trading, a market-incentive environmental regulation, plays a critical role in leading China towards the carbon peaking and carbon neutrality. To improve the national carbon emission trading in China, we analyze the effects of the policy in pilot provinces and pilot A-share listed firms from 2008 to 2016. Particularly, to explore the pilot policy's environmental and financial impacts, this paper applies a difference-in-difference method. After the robustness check, the results confirm the carbon emission trading pilot's significantly positive impact at both firm- and province-level regarding carbon emission reduction. Meanwhile, corporate innovation seems to partially mediate the relationship between the policy and corporate carbon emission reduction. Plus, the policy promotes firms' market-based financial performance but such impact on accounting-based financial performance is insignificant. Ultimately, the operational mechanism of the policy is proved to be effective. In this paper, industry- and firm-level carbon emissions databases are established via environmental extended input-output table, which fill the research gap of China's firm-level carbon emissions. To ensure the reliability of results, the list of covered firms is sorted out manually in accordance with the disclosed data of seven carbon trading markets. Our results are meaningful for avoid productivity reduction and mechanism re-design in the context of the national carbon emission trading launched in 2021. Specifically, encouraging firms to further improve their productivity and competitiveness by innovation could eventually achieve a win-win situation between economic performance and environmental merits in the long run. [ABSTRACT FROM AUTHOR]

This paper presents an energy-sharing market coupled with carbon emission trading to quantify peer-to-peer energy-sharing markets' economic and environmental influences. We establish a bi-level peer-to-peer energy sharing market considering the interaction between energy prosumers and the system operator. An interaction algorithm and generalized Nash game are thus applied in this work. With the simulation results, we find that the daily disutility of provincial systems is reduced by about 7 ¥ when time-of-use electricity rates are applied. This pricing strategy can encourage prosumers to participate in energy-sharing transactions. The subsidies of electricity rates, carbon prices, and renewable energy investments can improve the social welfare of the whole system. Considering the development of power generation technology and emission reduction targets, the change of optimization parameters in the next 30 years is analyzed in the example. It can be concluded that the total CO2 emission in 2050 will be reduced to almost half of that in 2020 in the energy-sharing markets. The subsidy of renewable energy generation and stricter CO2 emission constraints may accelerate the reduction of carbon emissions. [Display omitted] • It is the first time to assess the environmental effect of peer-to-peer energy trading with actual data. • We analyze the peer-to-peer energy trading impacts on the carbon emission amount in China. • We compare the market participants' revenue and CO2 emission considering the different scenarios. • We develop a bi-level coupled emission right trading market to verify whether total emission is reduced. • The development of technologies and various energy structures are considered quantitatively. [ABSTRACT FROM AUTHOR]

Emission trading scheme (ETS) is considered as a tool to reduce emissions at a low cost, which can effectively promote the carbon peak and carbon neutrality. As the main participants in the carbon emission trading (CET) market, the behavior and strategies for governments and different types of enterprises affect the final emission reduction performance. Taking the national carbon market as an example, this paper constructs a tripartite evolutionary game model including governments and power generation enterprises with different emission reduction capacity to analyze the possible game situations in the development process of the CET market. The results show that with the development of the CET market, the governments and power generation enterprises will have different game results. In order to achieve the optimal stable equilibrium and maximize carbon emission reduction, governments should improve regulatory efficiency and formulate appropriate incentive strategies for excess emission reduction and punishment strategies for insufficient emission reduction. In addition, the initial willingness will not affect the final strategy choice of the three parties. Reasonable free carbon quota ratio, lower technology emission reduction cost and higher carbon price can stimulate the enthusiasm of governments and enterprises to reduce emissions. The above results provide a reference for coordinating the relationships between governments and power generation enterprises with different emission reduction capacity in the construction of the CET market in the future. [ABSTRACT FROM AUTHOR]

Emissions trading system (ETS) is a cost-effective way towards achieving the carbon neutrality goal. Based on the gaps in the research on carbon allowance allocation vis-à-vis the carbon neutrality target, this study examines how to allocate carbon allowances equitably and effectively among Chinese provinces. Different from the previous research that mainly considers responsibility, ability, and potential of equity dimensions, this paper proposes a composite indicator allocation approach based on the equity of history, demand, contribution, and guarantee, and it also employs the entropy method and expert survey method to obtain the indicator weight values in different scenarios. Results show that the carbon allowances of some provinces, such as the forest-rich province of Yunnan, vary significantly in five scenarios, but little differences are observed for some provinces, such as the high historical emissions province of Shanxi. More provinces achieve data envelopment analysis efficiency in the preferred scenario. Compared with the objective scenario, the required emission reduction in the preferred gross domestic product (GDP) scenario is 231 million tonnes less, and the emission reduction cost is 190 billion yuan less. It is suggested that the Chinese government should adopt the allocation scheme in preference for the GDP scenario. [ABSTRACT FROM AUTHOR]

The implementation of market-based climate policies represented by the emission trading system (ETS) is an important path for countries to participate in global climate governance and achieve the goals of carbon emission peaking and carbon neutrality. Whether the covered firms can improve financial performance through bearing responsibility for cutting emissions, a "win-win" of environmental and economic achievement, is an important way to evaluate the effectiveness of ETS. Based on the Chinese A-share listed firms in industrial sector during the period of 2010–2017, this paper employs PSM-DID method to investigate the impact of China's pilot ETS on financial performance of the covered firms. The results show that the covered firm's financial performance is improved by the implementation of pilot ETS, which can increase firm's ROA by 0.01 unit. Specifically, the pilot ETS can significantly improve the financial performance of non-state-owned firms, without affecting state-owned firms. Similarly, the financial performance improvement is more significant for firms in non-energy industries. Furthermore, the pilot ETS can motivate the covered firms to gain financial profit through cutting carbon emission as a mediation path, and the mediation effect size of carbon emission intensity is 0.001. Besides, firm's innovation ability weakens this mediation path, and the well-developed institutions in pilot area, proxied by high degree of marketization, only weaken the first part of the path, namely, carbon emission reduction led by ETS. • ETS achieves a win-win of carbon emission reduction and financial performance improvement. • The improvements by ETS are heterogeneous in ownership and industry. • Firm's carbon emission intensity plays a mediation role. • Firms can gain more benefit under the ETS regulation if the market monopoly is strong. [ABSTRACT FROM AUTHOR]