Applied Micro Seminar : Every Tuesday
Time: 12:15 pm – 13:30 pm
Date: 15th of October
Room : 3001

Shuang ZHANG (Imperial College London) – “Global Climate Calamity vs the Market: Nationwide Carbon Trading in China”

Abstract :“The world’s largest carbon emitter, China, launched the world’s largest emissions trading scheme (ETS) to reduce carbon emissions in 2021. The efficacy of China’s national ETS is unclear for two main reasons. First, unlike the EU ETS, which caps firm’s absolute level of emissions, China ETS is a rate-based system that regulates emission intensity. The key difference is that a rate-based ETS does not incentivize reduction of intended output. Second, there are significant challenges in monitoring and data quality. This project provides the first empirical research on the efficacy of the first major rate-based ETS. First, we evaluate the first-order effects of China’s rate-based ETS on firm output, carbon emissions, and emission intensity. The primary challenge is the lack of reliable data on firm carbon emissions. Our innovation is to develop innovative data based on satellite imagery and machine learning, which will provide an independent and objective benchmark to carbon data reported by firms. Second, we examine whether China’s rate-based ETS induces changes in air pollution and health outcomes, and thereby help quantify environmental co-benefits. A comprehensive cost-benefit analysis of the rate-based system will be conducted.”

Organizers:
Benoît SCHMUTZ (Pôle économie du CREST)
Clément MALGOUYRES (Pôle économie du CREST)

Sponsors:
CREST