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This study explores the impact of political uncertainty on sustainable urban development by examining carbon emission trading systems (ETS) in four major markets in China (Beijing, Shanghai, Guangdong, and Hubei) from 2014 to 2022. As an alternative to carbon taxes, carbon ETS markets have become increasingly popular due to their success in reducing greenhouse gas emissions. However, their effectiveness is often hindered by political instability and uncertainty. Utilising logistic regression and AR(1)-GARCH estimations, we identify a negative relationship between political uncertainty and carbon trading volume. Our study also reveals significant variations in the responses of these markets to political uncertainty. The paper contributes to the understanding of how ETS markets operate in a complex and constantly changing political environment. We suggest that policymakers need to consider the impact of political uncertainty on carbon trading when designing and implementing urban policies that promote sustainable development. Additionally, our research contributes to the development of urban policies that can be effectively implemented in both developed and developing regions. • Local government official turnovers are used as the measurement of political uncertainty. • Daily transaction data from four carbon ETS markets (Beijing, Shanghai, Hubei and Guangdong) in China • Considered the probability and proportion of zero transaction day • Logistic regression and AR(1)-GARCH estimations • A negative relationship between political uncertainty and carbon transaction volume [ABSTRACT FROM AUTHOR]

Abstract: Carbon taxes have largely been discussed as individual country measures (even if taken simultaneously) aimed to reduce carbon emissions, slow global warning, and internalizing the externalities associated with carbon generating activities, such as power generation. There has however been little emphasis on the incentives for subgroups of countries to jointly peruse carbon taxes. Yet for large importers of oil such as the US, the EU and China, their incentive is clearly to act together and have their taxes partly or wholly borne by oil exporters given this incentives. This paper discusses the potential for joint OECD (or non-OPEC) carbon taxes to reduce OPEC''s monopoly rent and provide benefits to non-OPEC countries provided jointly agreed trigger strategies are adhered to enforce mutual cooperation. To this end, we develop a multi-region general equilibrium structure with an endogenously determined oil supply by OPEC in which both emissions and energy prices are endogenously determined. Our results suggest that jointly enacted carbon taxes by the US, the EU and China can be heavily borne by oil exporters; they reduce the welfare of OPEC and increase the welfare of non-OPEC countries. These carbon taxes reduce global emissions, but the effect is small. [Copyright &y& Elsevier]