A Study On The Policy Effect And Mechanism Of The Carbon Emission Trading On The Carbon Efficiency Of Thermal Power Plants In China

In order to cope with climate change and reduce greenhouse gas emissions such as carbon dioxide,China announced its carbon peak and carbon neutrality target vision in 2020 following global paradigm.Evidently,it is crucial to study the path to achieve carbon emission reduction in China.In the 14th Five-Year Plan,China has clearly defined carbon emission reduction targets and specific measures for the next five years.Accelerating the construction of a national emissions trading system is a key initiative.The carbon emissions trading system is a market-oriented tool for carbon emission reduction,so it is an important academic issue to study its emission reduction effect.China launched eight pilots in batches in 2013,2014 and 2016,including Shenzhen,Shanghai,Beijing,Guangdong,Tianjin,Hubei,Chongqing and Fujian.This initiative actually provides a good natural experiment for policy evaluation studies to study emissions trading.After the pilot operations,China officially launched a national carbon emissions trading market in 2021.As the main source of carbon emissions,the thermal power industry was the first to be included in the national carbon market for trading.This paper calculates the carbon efficiency of thermal power plants,and systematically analyzes the policy effect and mechanism of the carbon trading system on the carbon efficiency of thermal power plants in the pilot areas.Firstly,this paper uses the non-radial directional distance function(NDDF)to define and calculate the carbon efficiency of 92 thermal power plants in China from 2005 to 2015.And the carbon efficiency change trend of thermal power plants is analysed from the perspectives of thermal power plant type and geographical location.Considering the carbon emission trading pilot as a quasi-natural experiment,this paper evaluates the carbon efficiency policy effect of the carbon emission trading system by the multi-period difference-in-differences model(DID).Subsequently,the robustness test of the benchmark regression results is carried out.Next,from the perspective of enterprise innovation ability and the emission effect and output effect of thermal power plants,this paper studies the impact mechanism of carbon emission trading on thermal power plants.Finally,a heterogeneity analysis is carried out in this paper.The policy effects on carbon efficiency under different sub-samples are studied from three aspects,which refer to the ownership of thermal power plants,the scale of thermal power plants and the degree of marketization in the area where thermal power plants are located.The main findings of this paper are as follows.(1)According to the results calculated by the NDDF model,the carbon efficiency of thermal power plants in the pilot area has shown an upward trend since the pilot project of carbon emission trading was launched in 2013.(2)The regression results of the DID model show that the carbon trading system significantly improves the carbon efficiency of the pilot areas by 2.9%.Moreover,the results pass the robustness test,including replacing dependent variables,excluding other policy effects and placebo tests.(3)The results of the mechanism analysis confirms the Porter hypothesis,which means reasonable environmental regulations can incentivize enterprises to carry out technological innovation.The carbon emissions trading system has significantly improved the number of patents,which represents innovation ability of thermal power plants.Moreover,the carbon emission trading makes the emission effect and output effect of thermal power plants exist at the same time,and the rate of decline in carbon emissions is greater than the rate of decline in power generation of thermal power plants,so that the carbon efficiency of thermal power plants can be improved.(4)The heterogeneity analysis results show that the positive incentive effect of the policy on thermal power plants with these characteristics is more obvious,including non-state-owned,large-scale,and high degree of marketization in the region.However,the policy has had a negative impact on power plants with such characteristics,such as the low degree of marketization and small scale in the region.According to these conclusions,some policy implications are put forward.Firstly,it is recommended that government departments encourage state-owned enterprises to play aleading role,and establish market mechanisms to improve policy transparency and feasibility.Secondly,areas with a low degree of marketization should reap more preferential policies.It is necessary to build a good competitive incentive system,so as to stimulate the endogenous power of innovation of power enterprises.Finally,it’s better to gradually reduce the number of small-scale power plants.And building clean energy plants is a solid path.Only by promoting the development of energy transformation,can we take the road of sustainable development of low-carbon economy.