Can Carbon Emission Trading Policy Reduce Haze Pollution

Since the reform and opening up,China’s economic development has given rise to many environmental problems,and haze is one of the most serious types of pollution,which has a huge impact on human health,social and economic development and the natural ecological environment.However,China’s traditional command-and-control approach to environmental regulation has many drawbacks and cannot effectively solve the problem of haze pollution,so the Chinese government urgently needs to find more efficient ways and means.The relationship between carbon trading policies and haze pollution is therefore important to be studied.Firstly,this paper compares the current situation of domestic and international research and defines relevant concepts from three perspectives: haze pollution,environmental regulation and carbon trading;secondly,this paper introduces and elaborates theories such as carbon emissions trading theory,Porter’s hypothesis theory,environmental Kuznets curve theory,pollution governance theory and causal inference,and analyses the current situation of carbon trading development,Hubei carbon trading operation mechanism and the current situation of haze pollution in China;next.This paper compares relevant models and methods,selects the synthetic control method to construct a counterfactual framework when carbon trading policy is not implemented in Hubei,uses provincial panel data from 2000-2016 to assess the impact effect of carbon trading policy on haze pollution in Hubei,and verifies the impact of carbon trading policy on haze pollution through placebo test,lag test and ranking test;Finally,this paper continues to study carbon trading policy in depth,building a mediating effects model to verify the technological innovation incentive mechanism and fossil energy constraint mechanism of carbon trading on haze pollution,discussing the government intervention and market role in carbon trading policy through a multi-period double difference model,and constructing a spatial econometric model to verify the spatial spillover effect of carbon trading policy on the existence of pollution in surrounding areas.The results of the empirical analysis of this paper show that:(1)the carbon trading policy in Hubei province leads to a reduction of PM2.5 concentration by about 10% within five years.(2)The carbon trading policy mainly reduces PM2.5 concentrations by reducing the use of fossil energy sources such as coal and increasing investment in technological innovation.(3)When both government intervention and market mechanisms work together,they can significantly reduce haze pollution,but when only market mechanisms exist,the effect of market mechanisms is not significant,and when only government intervention exists,carbon trading can still significantly reduce haze pollution.(4)While carbon trading policies suppress local haze pollution,they also lead some enterprises to transfer pollution to surrounding areas,making their haze pollution intensify and generating spatial spillover effects.The policy recommendations of this paper are as follows:(1)The government should actively encourage and guide enterprises to increase investment in technological innovation,use various means to reduce the use of fossil energy and reduce pollution emissions.(2)Carbon trading should always adhere to the "market-determined" development strategy and the decisive role of the market in the allocation of carbon emission rights.(3)In order to avoid market failure,the government should give full play to macroeconomic regulation and control tools,and formulate laws and regulations that are adapted to the development of the market,so as to make up for the problems caused by the limitations of the market itself.(4)To expand the coverage of the carbon trading market and promote carbon trading to cover more market players.The possible innovations of this paper focus on the following three aspects:(1)This paper evaluates carbon trading policies from the perspective of haze pollution,which enriches the theory of carbon trading policy evaluation and verifies the rationality of the design of carbon trading market elements in China.(2)This paper assesses the causal relationship between carbon trading policy and haze pollution by taking carbon trading,a market-incentivized environmental regulation,as the research object,and explores a new possible way to combat haze pollution.(3)This paper adopts a synthetic control method to assess the causal relationship between carbon trading policies and haze pollution,which overcomes the estimation errors caused by carbon trading policies to a certain extent and enhances the credibility of the assessment of carbon trading policies.