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Greenhouse gas emissions from the use of fossil energy are the main drivers of global warming. China's dominant consumption of fossil energy necessitates adjustments in its energy consumption structure to break free from the carbon lock-in (CLI) phenomenon. Market-based environmental regulations, represented by the carbon trading market (CTM), play an important role in achieving the dual carbon goals of China. Using panel data of 270 prefecture-level cities in China from 2005 to 2020, this study applies a difference-in-difference model to identify the effect of CTM on urban CLI, analyze its transmission mechanism, and further examine the impact of urban characteristic heterogeneity on policy effects from multiple perspectives. Results show that the construction of CTM significantly reduces the degree of CLI of pilot cities; (2) CTM mainly affects urban CLI by promoting urban green technology innovation, industrial structure upgrading, and public green behavior; and (3) the inhibitory effect of CTM on CLI is more significant in cities with high carbon price, industrialization, and digital finance levels. The primary paths toward realizing carbon unlocking include optimizing the institutional design for CTM, enhancing the effective promotion and application of low-carbon technologies, cultivating the green awareness of the public, and increasing government investments in energy-saving and emission reduction techniques. • CTM can significantly reduce urban CLI. • Public green behavior have a positive mediating effect. • The inhibitory effect of CTM on CLI is stronger in high-digital finance cities. [ABSTRACT FROM AUTHOR]

• The influencing factors of carbon prices in China's carbon market are analysed. • The influencing factors and historical data are combined to predict the carbon price. • The EEMD-BP-ELM model and the CHINAGEM-E model are constructed and combined. Carbon price is one of the core indicators of the carbon market. Making accurate predictions of carbon prices based on insight into the volatility characteristics of the carbon market will not only provide a scientific basis for investors and regulators to make decisions and greatly promote emission reduction, but also effectively promote the healthy development of the carbon financial market. Based on the historical carbon price data of the national carbon market, this paper constructs the EEMD-BP-ELM model to predict the high and low frequency components of China's future carbon price. On this basis, according to China's goal of peaking carbon emissions before 2030 and achieving carbon neutrality before 2060, the CHINAGEM-E model is used to predict the trend component of the carbon price under the baseline and the 2060 carbon neutral scenarios. Finally, the trend component is combined with the high and low frequency components to obtain the price range from 2022 to 2060. We find that under the baseline scenario, China's carbon price range in 2060 is [343, 785] CNY/tCO2, while under the 2060 carbon neutral scenario, this price range is [1543, 3531] CNY/tCO2. [ABSTRACT FROM AUTHOR]

• Constructing a new welfare function considering economy, equity and ecology. • Optimizing carbon emission pathways from multiple perspectives. • Focusing on the emission pathways in China achieving the ambitious targets. With the increasing climate warming, reducing carbon emissions has gradually become a consensus around the world. However, the process of carbon emission reduction will inevitably lead to the transformation of economic structure, industrial structure and energy structure, which will bring huge changes in economic output, employment and other aspects, thus affecting the overall social welfare and equity. Therefore, it is particularly important for each country to determine a scientific and effective carbon emission pathway which take into account both social development and climate targets. As the largest carbon emitter, China has put forward the targets of carbon peak and carbon neutrality. In this regard, the corresponding carbon emission reduction scenarios are designed according to the new situation of China's emission reduction in this paper, firstly. Furthermore, under the premise of maximizing social welfare, an optimization model which integrating economic growth-equity-environment is developed to determine China's emission pathways under different scenarios from 2020 to 2050. Besides quantitatively showing the future total amount and peak value of carbon emissions under different scenarios, the results can also identify its evolution pathway over time. Therein, the peak under most scenarios will concentrate in 2025–2030, which is about 10.7 to 11.8 billion tons. With the increasingly stringent constraints on carbon emission reduction, the cost of emission reduction will increase correspondingly, but the overall social welfare will increase slightly. Finally, our findings provide practical guidance on achieving carbon emission reduction and enlightenments on policymaking. [ABSTRACT FROM AUTHOR]

The Corona Virus Disease 2019 (COVID-19) has led to a decline in carbon emissions or an improvement in air quality. Yet little is known about how the pandemic has affected the "low-carbon" energy transition. Here, using difference-in-differences (DID) models with historical controls, this study analyzed the overall impact of COVID-19 on China's low-carbon power generation and examined the COVID-19 effect on the direction of the energy transition with a monthly province-specific, source-specific dataset. It was found that the COVID-19 pandemic increased the low-carbon power generation by 4.59% (0.0648 billion kWh), mainly driven by solar and wind power generation, especially solar power generation. Heterogeneous effects indicate that the pandemic has accelerated the transition of the power generation mix and the primary energy mix from carbon-intensive energy to modern renewables (such as solar and wind power). Finally, this study put forward several policy implications, including the need to promote the long-term development of renewables, green recovery, and so on. • The overall impact of COVID-19 on energy transitions from the perspective of low-carbon power generations was analyzed. • By using the stacked data, the COVID-19 pandemic increased the low-carbon power generation by 4.59%. • The overall results were mainly driven by solar and wind power generation, especially solar power generation. • The pandemic has accelerated the transition of the energy mix toward renewable energy sources. [ABSTRACT FROM AUTHOR]

This study takes Green Credit Guidelines in China as a quasi-natural experiment to examine its effect on the quality of green innovation in heavily polluting enterprises. Based on the data of Chinese listed companies from 2008 to 2019, DID model, and a series of robustness tests, findings show that Green Credit Guidelines significantly improve the quality of enterprises' green innovation. The positive effect is more significant in state-owned enterprises and those in the eastern region and less financially developed areas. The officials' promotion pressure and fiscal decentralization have negative and positive moderating effects, respectively. Additional analysis demonstrates that the quality improvement of enterprises' green innovation can further increase their economic returns. Specifically, the competitiveness and market value of enterprise products are enhanced. The results provide enterprises with theoretical guidance on how to deal with environmental regulation. The results also provide countries around the world, especially developing countries, with important reference to implement green credit policy to achieve sustainable development. • Green Credit Guidelines improve the quality of green innovation in enterprises. • Promotion pressure has a negative moderating effect on the impact of Green Credit Guidelines, while fiscal decentralization has a positive one. • Green Credit Guidelines can enhance the product competitiveness and market value of enterprises by improving the quality of green innovation. [ABSTRACT FROM AUTHOR]

Ensuring that the Belt and Road Initiative (BRI) is green and low-carbon is crucial to tackling climate change while simultaneously promoting a win-win outcome of BRI countries. In recent years, China has altered its BRI Foreign Direct Investment (FDI) portfolio by reducing investment in carbon-intensive sectors and increasing it in non-carbon-intensive sectors. Therefore, it is particularly important to assess the potential of these two types of sectors in attracting China's FDI, and to identify the major determinants of investment. In our study, the results of a stochastic frontier gravity model and inefficiency model on 2008–2017 data covering 132 countries, including 98 BRI countries, show that the potential for China's FDI in non-carbon-intensive sectors is higher than that in carbon-intensive sectors. Furthermore, the determinants of China's FDI in these two types of sectors are significantly different. The study's results can be used to inform China's investment policy, and render positive contributions to the green BRI based on location and sector information. • We analyze whether a sector's carbon intensity affects China's FDI in that sector. • We also identify the determinants that drive investment. • Stochastic frontier gravity model, inefficiency model are used on 132 countries' data. • Chinese FDI potential is more likely in non-carbon-intensive sectors. • Determinants of FDI differ for sectors with different levels of carbon intensity. [ABSTRACT FROM AUTHOR]

This paper investigates whether the China ETS policy has achieved carbon emission reduction at the expense of economic development. Moreover, we are interested in unmasking the role of the institutional factors adopted by the ETS pilots in their ETS effects. Using the province-level panel data during the 2008–2016 period. we employ the DID model to compare carbon emissions and economic development between the ETS and non-ETS regions and between the pre- and post-ETS periods. Some novel empirical findings emerge. First, compared with the non-ETS areas, the ETS policy has significantly reduced carbon emission in the ETS areas. This emission reduction has not come at the cost of economic development. Second, the ETS policy leads to a decline in carbon intensity and fossil fuel energy consumption relative to all energy types. Lastly, some heterogeneity across markets arise. The Beijing carbon market performs the best among all pilots in terms of achieving targets of carbon reductions, followed by the Hubei carbon market. [ABSTRACT FROM AUTHOR]

• Convergence in energy efficiency of BRI counties and its factors are studied. • Energy efficiency along BRI experienced an increasing trend except 2009 and 2010. • BRI countries with low TFEE are catching up with countries with high TFEE. • High-income & Eastern Europe and West Asia countries have faster catch-up rate. The Belt and Road Initiative (BRI) has raised concern that it may involve an extensive economic growth pattern at a higher cost of energy and the environment, and China is making a great effort to construct a green BRI, which may improve the general energy efficiency of BRI countries. Therefore, it is important to investigate whether backward countries with low energy efficiency are catching up with frontier countries or falling behind. In response, this paper adopts DEA to calculate the total-factor energy efficiency (TFEE) of the BRI countries, and investigates heterogeneous beta-convergence in energy efficiency of BRI counties and its factors. The results indicate that: (1) except for 2009 and 2010, the TFEE along the BRI experienced an increasing trend due to the global finance crisis; (2) BRI countries with low TFEE are catching up with countries with high TFEE, and more significantly when the TFEE growth rate is greater; (3) the TFEE converges at a faster rate in high-income BRI countries and Eastern Europe and West Asia countries; and (4) inadequate innovation ability and a weak R&D absorption capacity may decelerate the energy efficiency convergence rate of BRI countries, especially those with low-income. [ABSTRACT FROM AUTHOR]

Green credit is a major policy innovation to guide enterprises to participate in environmental governance actively. This study uses the data of Chinese A-share listed companies from 2007 to 2016, takes the green credit guideline (GCG) issued in 2012 as a quasi-natural experiment, and uses a difference in difference (DID) model to test the effect of GCG on the enterprises' export green-sophistication (EGS) and its internal and external mechanisms. The study finds that GCG improves enterprises' EGS and research and development (R&D) investment is the intermediation channel for GCG to affect EGS. Results of heterogeneity analysis show that the role of GCG in promoting EGS is significantly reflected in enterprises that the government does not subsidize, enterprises in areas with a low degree of financial marketization development, state-owned enterprises, and enterprises with a high degree of equity incentive. • GCL can significantly improve enterprises' EGS. • Firms' research and development expenditure have a positive mediating effect. • The improvement effect of GCL on EGS is stronger in state-owned firms. [ABSTRACT FROM AUTHOR]

China plans to launch its nationwide Emissions Trading Scheme (ETS) in 2017. Uncertainty in China’s future economic growth rate and its effect on underlying emissions may need to be addressed to ensure stability of the scheme. This article investigates anex-postcap adjustment mechanism for China’s ETS. An applicable rule for indexation of emissions targets to gross domestic product (GDP) adjustment is presented. Such anex-postoptimal emissions intensity target is estimated in an empirical simulation of the Hubei ETS, a large pilot scheme in a fast-growing Chinese province. And its implications for China’s planned national ETS have been discussed. The article finds that by correcting the emissions cap for the difference between expected and realized GDP, theex-postadjustment can minimize the abatement costs. It can also limit the influence of uncertainties, as it minimizes the standard deviation of realized abatement, abatement cost, and allowance price for a given expected emissions reduction. In addition, with a limited number of parameters requiring estimation, theex-postcap adjustment mechanism is feasible. It is consistent with the anticipated design of China’s planned national ETS and could be used alongside other design options such as price corridors. POLICY RELEVANCE It will be important for the stability of China’s planned national ETS to address uncertainty about future GDP growth which can significantly affect underlying emissions growth. This paper proposes a specific solution, namely anex-postcap adjustment mechanism for the ETS cap. This method provides flexibility with transparent rules, would be consistent with China’s overall ETS policy design, and could be implemented in practice as the required parameters can be readily estimated. [ABSTRACT FROM AUTHOR]

In October 2022, China released the Fourth National Assessment Report on Climate Change. The third part, which is on climate change mitigation, describes China' s challenges and opportunities, carbon emissions reduction progress, and the impact of China ' s socioeconomic transformation on emission reduction. It then assesses carbon emission reductions in energy supply and demand sectors (industry, construction, and transportation), carbon sinks and non-CO2 greenhouse gas emission reduction, as well as CCUS and geo-engineering technologies. Finally, it analyzes the pathways to reaching peak carbon emissions by 2030 and achieving carbon neutrality by 2060. It is hoped that the conclusions of the assessment will provide an important scientific reference for China' s sustainable development toward reaching peak carbon emissions and achieving carbon neutrality. [ABSTRACT FROM AUTHOR]

The allowance mechanism is one of the core and sensitive aspects in the design of a carbon emissions trading scheme and affects the compliance cost for each entity covered under the scheme. By examining China’s allowance mechanism from two aspects-allowance allocation and allowance distribution, this paper compares China’s carbon trading pilots with the EU Emissions Trading Scheme and California Cap-and-Trade Program. The comparison identifies the unique features in allowance mechanism and particular issues that affect the efficiency of the pilots. The paper also recommends courses of action to strengthen China’s existing pilots and to build valuable experiences for the establishment of the national cap-and-trade system in China. [ABSTRACT FROM AUTHOR]

Highlights • Designing a carbon leakage prevention policy for developing countries. • In addition to cost and trade intensity, the abatement potential is introduced. • Distinguishing industrial differences by continuous and dynamic coefficients. • Using Hubei Province data to verify the applicability of policies. Abstract Carbon leakage has become the core issue of emission trading systems. Using data from Hubei Province, this paper identifies the drawbacks of the prevailing methods for preventing carbon leakage and proposes a new methodology to overcome them, namely, Emission Control Coefficients. In contrast to the common tiered structure method, the Emission Control Coefficients generate a dynamic and continuous emission control coefficient for each industry which will improve the effectiveness and fairness of allowance allocation, set aside sufficient time for the low carbon transformation of industries, and balance the needs to protect competitiveness and decarbonize and are particularly suitable for the emission trading systems of developing counties. This paper makes three main academic contributions: Firstly, it proposes a new indicator, the abatement potential for more effective determining allowance allocation than the prevailing method. Secondly, it better distinguishes industrial differences. Thirdly, it can better respond to the problem of excess allowances that is due to technological advances and trade pattern changes. [ABSTRACT FROM AUTHOR]

Addressing major challenges such as climate change and carbon neutrality requires a transition to new low-carbon energy carriers and improvements in energy efficiency. The majority of previous studies adopted a one-directional approach to examine the factors affecting energy transitions and did not quantitatively estimate the driving effects of different factors on low-carbon energy transition from the two perspectives of energy mix and energy efficiency. This study aimed to explore which mechanisms can effectively drive the low-carbon energy transition under the current setting and what cross-cutting insights might be gained from energy transition dynamics observed in a large and emerging economy such as China. After employing Baron and Kenny's three-step procedure to identify the mediating effects, we found that policy factors constitute the main forces behind the transition of the energy structure toward natural gas, and that technical knowledge stock mediates the impact of both energy-saving goals and new energy subsidy policies on energy intensity. Furthermore, under the pressure of energy-saving target assessment, local governments have adopted a "campaign-style" energy-saving approach. Moreover, state-owned capital may assume greater importance in the advancement of energy transition relative to other ownership types. Finally, this study put forward several policy implications, including the need to promote long-term mechanisms, low-carbon technologies, and renewable energy. • The driving effects of policy, technological, and economic factors on low-carbon energy transitions are estimated. • Policy factors constitute the main forces behind the transition of the energy structure toward natural gas. • Technical knowledge stock mediates the impact of carbon-abatement policies on energy intensity. • Local governments have adopted a "campaign-style" energy-saving approach. • State-owned capital may assume greater importance in the advancement of energy transition. [ABSTRACT FROM AUTHOR]