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Emissions trading schemes (ETS) area is a leading climate policy instrument worldwide and have been widely discussed and researched. However, few studies to date focus on the nexus of ETS and income inequality, an important socioeconomic phenomenon. To fill this gap, taking China as an example, this paper discusses the influence of ETS on income inequality and its dynamic changes using a time-varying differences-in-difference model combined with a propensity score matching approach. The results demonstrate that China's pilot ETS has contributed to reducing income inequality. Various robustness tests support this conclusion. Moreover, the strength of ETS's contribution to reduction in income inequality gradually increases over time. We further analyze the mediating effects of carbon intensity, energy consumption, industrial structure, and technological innovation. ETS reduces income inequality by reducing coal consumption. The regional heterogeneity analysis shows that, unlike in other regions, ETS has a positive impact on income inequality (i.e. it increases it) in the eastern region in China due to its optimized energy structure and relatively complete, open, and flexible economy system. The paper discusses the above findings and their policy implications. It is also designed to promote research on ETS and to diversify research perspectives of income inequality from both theoretical and practical aspects. Evidence from China's pilot experience with ETS shows that it contributes significantly to balancing income distribution and alleviating the increasingly acute social conflicts caused by income inequality. This provides new theoretical and decision support for the promotion of ETS in the future. The energy revolution driven by ETS promotes income redistribution, which is conducive to income equality. Governments should enforce the constraints of ETS on power generation companies; guide capital to invest more in the non-thermal power industry, especially the renewable energy power sectors; and guide and regulate the income distribution in new power sectors. Governments' revenue from ETS can and should be used to further redistribution of income and to reduce income inequality. A higher number of free quotas and a lower carbon price could be imposed on low-profit or labor-intensive industries to reduce their emission costs. [ABSTRACT FROM AUTHOR]

This paper examined the economic impacts of China's emissions trading system (ETS), implemented in 2013, in terms of gross domestic product (GDP) and per capita GDP. The methodology drew on a difference-in-differences (DID) method using dynamic panel data for 30 provincial regions. The estimation results show that implementing an ETS policy has statistically significant negative effects on economic growth. When considering the additional control variables, these effects are still statistically significant. Furthermore, these negative impacts increase over time with respect to both GDP and per capita GDP. The counterfactual tests confirm the robustness of our DID estimation results. The specific influence mechanism of China's ETS policy was finally discussed. Our findings provide a quantitative decision-making support for popularizing ETS policy in China. Based on our DID model, empirical investigations of the ETS policy, especially concerning economic growth in other regions would produce prolific contributions to the literature. [ABSTRACT FROM AUTHOR]

Prior studies focus mainly on the influence of ETS on energy consumption, carbon emissions, and the economy; however, the effects on energy consumption and output structure still need to be discovered. This study employs a time-varying difference-in-differences approach to test whether China's ETS significantly affects energy structure represented by coal, oil, and natural gas consumption and renewable energy output. The results show that the ETS policy significantly reduced China's coal and oil consumption and increased natural gas consumption and renewable energy output. Besides, the influence of ETS on energy structure becomes increasingly significant over time. The results demonstrate that energy investment mediates the effects of ETS on energy consumption and output structure, and industrial structure mediates the effects on coal and fossil consumption. In addition, as economic development increases, the negative effects of ETS on coal and oil consumption decrease, the positive effect of ETS on natural gas consumption increases, and the positive effect of ETS on renewable energy output decreases. As the share of the secondary sectors increases, the negative effect of ETS on coal and oil consumption decreases, the positive effect of ETS on natural gas consumption decreases, and the contribution of ETS to renewable energy output increases. [ABSTRACT FROM AUTHOR]

As the main climate policy, emissions trading scheme (ETS) has been proved by scholars to have significant impacts on carbon dioxide (CO 2) emissions and energy consumption reduction worldwide. However, existing studies have focused mainly on the simulated impacts of ETS and few studies have poured specific attention into the actual impacts and their dynamical change, which may lead to an ambiguous understanding of ETS's performance. Here, taking China as the case study, this study investigated the net dynamic impacts of ETS policy on low-carbon development with respect to CO 2 emissions, carbon intensity, energy consumption and energy intensity using a difference-in-differences method. The findings indicate that there is a positive relationship to some extent between carbon trading system and low-carbon transformation. The effect of ETS policy on low-carbon development will gradually increase over the time. When the variables population, gross domestic product, ratio of the secondary industry, technical level, and income level are controlled, these conclusions are also robust. In addition, common trend hypothesis and counterfactual test were used to confirm the reliability of the conducted difference-in-differences models. The findings are conductive to the future ETS policy-making and the research framework proposed in this study is also applicable to the assessment of global climate policy. • This study explores the low-carbon impacts of emissions trading scheme. • Difference-in-differences model are conducted base on emissions trading scheme. • Emissions trading scheme significantly negatively impacts low-carbon development. • All the difference-in-differences models pass the robustness test. • The findings provide experience reference for the further promotion of ETS policy. [ABSTRACT FROM AUTHOR]