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This study incorporates fairness concern in a low-carbon supply chain coordination mechanism where a single manufacturer sells its product to consumers through a single retailer. We develop four different scenarios of the Stackelberg master-slave game utility model—both members are neutral (NN), the manufacturer (FN) or retailer (NF) has fairness concern, and both are not neutral (FF), where the Nash bargaining fairness reference is leveraged to capture the impact of fairness preference on low-carbon supply chain optimisation decision-making profits, level of carbon emission reduction, warranty period, and revenue-sharing. Finally, numerical studies are conducted to quantify the impact of the Nash bargaining fairness concern. Research shows that: (1) fairness concern made it worse for the retailer but beneficial for the manufacturer and the system. (2) fairness concern causes a reduction in the level of carbon emission reduction and warranty period. However, the reduction of carbon emission reduction trading price and a certain range of revenue sharing effectively reduces the impact of fairness concern on members. (3) The revenue-sharing contract effectively reduces the negative impacts of fairness concern on supply chain members. The paper is a guide for enterprises development and cooperation but also provides empirical evidence for the government. [ABSTRACT FROM AUTHOR]

We estimate the effect of carbon pricing policy on bank credit to greenhouse-gas-emitting firms. Our analyses exploit the geographic restrictions inherent in California's cap-and-trade bill and a discontinuity in the embedded free permit threshold of the federal Waxman-Markey cap-and-trade bill. Affected high emission firms face shorter loan maturities, lower access to permanent forms of bank financing, higher interest rates, and higher participation of shadow banks in their lending syndicates. These effects are concentrated among private firms, while credit terms of public firms are largely unaffected. Overall, we show that banks respond quickly to realizations of transition risk. [ABSTRACT FROM AUTHOR]

Strengthening carbon regulations and competitive pressures are forcing supply chains to provide environmental (e-) products to replace traditional (t-) products. However, cap-and-trade policy allows manufacturers, the main carbon emission emitters, to trade their emission permits freely. Considering manufacturers' power and key role in producing and carbon trading, we develop a duopoly model consisting of two competing manufacturers. Despite asymmetrical carbon emission reduction efficiencies, the two manufacturers can independently and simultaneously decide their respective t-/e-products outputs, emission reduction levels, and permits trade quotas. The unique Nash equilibrium is derived with the overall cap. We find that the low-cost manufacturer uses its cost advantage to invest more in emission reduction, then sells the excess emission permits to its rival, but makes its rival more competitive in product market. Interestingly, our results show that cap-and-trade policy triggers an industry collusion in which manufacturers reduce competition and improve the power and profits by reducing overall output and adopting differentiated product strategy. Furthermore, the cost advantage and high product substitution can accelerate low-cost manufacturer's transformation but hinder high-cost manufacturers. The impacts of cap-and-trade policy on consumer surplus and social welfare are also discussed to provide guidance for policy makers. [ABSTRACT FROM AUTHOR]

To align with the global goal of keeping temperature below 2∘C, a market-based initiative, “Emissions Trading System” (ETS), has been developed to mitigate climate change. However, while the carbon allowances traded at the ETS are mostly held and traded by polluting companies, financial actors engage in “speculation”, activities that might be detrimental to the functioning of the ETS have also invested in the ETS. By drawing from the big data archive of Google Trends, we construct a news-based speculation index to proxy for the role of speculation in the dynamics of carbon pricing. Given our preliminary finding of inherent volatility and the mixed-frequency nature of the dataset, we employ the GARCH-MIDAS econometric technique to test the hypothesis that an all-inclusive framework that reflects the emission compliance and emissions non-compliance dynamics of the ETS is the most accurate approach to modeling carbon prices. We show that higher speculation in the ETS fosters higher long-term volatility in carbon prices, that speculation is a good predictor of carbon prices, and that its positive impact on carbon price returns makes the ETS an attractive investment opportunity. We provide a data-driven framework upon which the growing debate about whether the behavior of the non-compliance emission actors in the ETS endangers or benefits the functioning of the ETS can be evaluated empirically. [ABSTRACT FROM AUTHOR]

With the global focus on climate and environmental issues, green and low-carbon development has become an important way to promote efficiency. However, more research is needed on whether the pilot carbon emissions trading policy can promote economic development while reducing emissions. The panel data of 30 regions in China from 2005 to 2020 are used to examine the impact of carbon emission trading policy on regional total factor productivity. The findings demonstrate that, while the carbon emissions trading pilot policy can enhance total factor productivity, its impact varies across regions. Notably, the policy fosters TFP growth in Beijing and Tianjin but hampers it in Hubei and Guangdong provinces, signifying regional heterogeneity in its effects. These results remain robust even after conducting placebo tests and DID model. Furthermore, the mechanism study reveals that the carbon emissions trading pilot policy affects total factor productivity through pure technical efficiency and scale effects. Given the more stringent environmental regulations brought by the "carbon neutrality" goal, understanding the impact of carbon emissions trading policies on total factor productivity lays the groundwork for establishing a national carbon emissions trading market. This promotes sustainable economic development by helping to achieve a win-win situation between environmental protection and economic growth. [ABSTRACT FROM AUTHOR]

Recently, it has been observed that the weather is changing constantly because of global warming. The government is urging everyone, including scientists and the general public, to help address the severe challenges caused by climate change. Addressing the pivotal issue of carbon emissions stemming from transportation, this manuscript delves into the development of an efficient and coordinated management system. The proposed solution involves a green solid transportation system employing a two-stage network to implement a carbon cap and trade policy. A mathematical model is introduced to underscore the significance of this approach. Because of market fluctuations, supply and demand constraints are not always the same. Therefore, a two-folded uncertainty is included in this article for a better realistic outcome. A ranking defuzzification approach is employed to convert this uncertainty into a deterministic measure. Two illustrative numerical case studies are presented to underscore the effectiveness and feasibility of the proposed approaches. Then, three multi-objective techniques are employed to obtain Pareto-optimal solutions for the addressed problem. After that, a comparative study among these techniques is introduced and a sensitivity analysis is added to explore how the objective functions are influenced by potential changes in supply and demand. In conclusion, the paper offers important insights and identifies areas for future research in this field. [ABSTRACT FROM AUTHOR]

The Western Climate Initiative cap-and-trade program is presented as a substantial contributor to reach the climate targets set by the governments in California and Québec, by constraining emissions through declining caps. Some doubts have however been cast on the effectiveness of this program. Using a supply–demand model and published data for the third compliance period (2018–2020), we estimate five scenarios for future emissions and changes in the program's features, and we analyse the resulting price path for compliance instruments. Our key contribution rests in the identification of the key drivers of the existing overallocation. Caps were set too high, and less emissions are actually covered compared to what is officially announced (76% in California, against a claimed 80%). Offset credits also contribute to the availability of compliance instruments. These drivers result in an excess of available instruments until 2030, preventing the cap-and-trade program to play its constraining role: caps will be exceeded and emission targets missed, while fully complying with the cap-and-trade requirements. However, putting an end to overallocation would not be sufficient to reach climate targets. Governments should either reduce the level of existing allowance caps by 19–24%, or about 385 Mt, or increase the amount of covered emissions without changing the level of current caps. [ABSTRACT FROM AUTHOR]

In September 2020, the European Parliament decided to include the CO2 emitted on the all intra-European and 50% of extra-European voyages in the European Union Emission Trading System (EU-ETS) starting from 2022, in order to reduce the CO2 emission. With the implementation of EU-ETS, the maritime supply chain will inevitably be significantly affected. Different carbon quota allocations in ETS have different impact on the CO2 emission reduction, which motivates us to investigate the effect of different carbon quota allocations on maritime CO2 emission reduction. Therefore, this paper considers two carbon quota allocations: the historical total quantity method and the historical intensity method, and develops a game model for each method. Then, the equilibrium solutions of each game model are analyzed. With the help of the system dynamics and the software Vensim, numerical experiments are conducted to verify the properties obtained in the analysis of the equilibrium solutions. The experimental results indicate that 1) Green technology (GT) can effectively reduce carbon emissions. Based on long-term simulation results, the GT investments will be gradually offset by profiting from carbon quota trading. 2) Profits may vary with price, but the Historical Intensity method consistently achieves better carbon reduction effects or relatively higher profits. 3) The marginal profits of companies with similar historical intensity baselines are almost the same. This gives an advantage to companies who implement green technologies earlier, as they can quickly gain returns from GT. • Comparing the effect of different carbon allocation methods on the maritime supply chain. • The historical intensity method reduces carbon emissions effectively, especially for companies with high unit emissions. • Using system dynamics to investigate the interaction of maritime supply chain. [ABSTRACT FROM AUTHOR]

Much attention has been devoted to the economic benefits of emission trading systems (ETSs), but research concerning the SO2 ETS in China is scarce. We examine China's SO2 ETS in 2007 from the perspective of industrial sub-sectors and employ the difference-in-difference-in-difference (DDD) model to test whether the SO2 ETS can promote industrial total factor productivity (TFP). We identify whether it is the average effect or the dynamic effect of the SO2 ETS that can improve industrial TFP. The heterogeneity test results indicate that this policy has diverse influence in different regions and industries, and the effect is better in pollution-intensive industries. We also find that the policy enhances industrial TFP by promoting efficient technological innovation and capital allocation. Our findings provide evidence that supports the Porter Hypothesis and a guide for the industrialization of developing countries. Chinese policymakers should strengthen environmental enforcement, set quotas accordingly, and encourage technological innovation to improve industrial TFP. [ABSTRACT FROM AUTHOR]

We examine the effects of environmental regulations on the profitability and value of Korean listed firms, exploiting the first phase of the Korean Emissions Trading System (ETS) as an exogenous shock. While previous studies have mainly focused on environmental regulations in developed countries, often yielding inconclusive results, emerging markets like South Korea remain less explored. Using data on Korean listed firms from 2011 to 2017, we explore the effects of the 2015 Korean ETS on environmental and financial performance in treated firms. We find that treated firms did not reduce their carbon emissions, but their environmental ratings improved. Moreover, the ETS slightly increased profitability but significantly decreased firm value. Treated firms also exhibited a higher systematic risk, indicating that investors account for future carbon risks. In summary, the Korean ETS has not effectively incentivized firms to reduce emissions and has diminished their long‐term value. [ABSTRACT FROM AUTHOR]

In response to the potential green swans event in the future, China is adopting market‐oriented means to encourage green development, specifically through carbon emission trading schemes. At the same time, under the outbreak of the current global pandemic, it is equally important to consider the impact of black swan events. Therefore, this study aims to analyse the fluctuations in carbon emission trading prices under green and black swan events by utilizing daily data from seven carbon emission exchanges in China from 2017 to 2020. The analysis includes the construction of multiple regression models, PVAR models, and panel threshold models. Additionally, the study addresses the endogeneity problem by using instrumental variables. The findings of the study indicate that: (1) Rising temperatures will drive up the carbon emissions trading price, and this impact will persist over time. On the other hand, increased humidity levels and sunshine hours will reduce the carbon emissions trading price. Furthermore, there is a positive correlation between the increase in the price of primary energy and the increase in the carbon emissions trading price. (2) The spread of COVID‐19 has a restraining effect on the increase in temperature and will have a long‐term negative impact on the carbon emissions trading price. (3) The threshold effect concerning the prevalence of pandemics is recognized, which implies that the impact of the epidemic is staged and nonlinear. Overall, the results of this article highlight the importance of a reasonable response to both black swan and green swan events in order to enhance the efficiency of the current emission trading scheme. [ABSTRACT FROM AUTHOR]

The evolving regulatory landscape within the European Union demonstrates a transition from prioritizing carbon capture and storage over carbon capture and utilization towards a more equitable treatment of both approaches in relevant legislation and policy frameworks. Nevertheless, the 'permanence' criterion of carbon dioxide in the products remains an ongoing challenge. Within the current European legal framework, harnessing the regulatory incentives depends on how long carbon dioxide remains in carbon capture and utilization products. The study elucidates the evolving regulatory landscape surrounding carbon capture and utilization by examining recent legislative initiatives and amendments to key directives such as the Emissions Trading System Directive and the Renewable Energy Directive. Furthermore, it explores the implications of the European Union Net-zero Industry Act and the Carbon Removal Certification Framework. In addition, this article examines and explains the need for expanding the scope of carbon capture and utilization and storage by incorporating pre-combustion carbon capture through methane splitting into the definition. [ABSTRACT FROM AUTHOR]

Drawing from the big data archive of Google Trends, we innovatively construct a novel data set, the composite news-based speculation index, to proxy for the role of speculation in the predictability of carbon prices. We employ a theory-based multi-factor predictive framework to test the hypothesis that both emission compliance and emission noncompliance dynamics of the ETS matter in the predictability of carbon prices. We show that speculation is a good predictor of carbon prices. We find the robustness of the forecasting power of speculation in the predictability of carbon prices evident for both in-sample and out-of-sample forecasts and across different forecast horizons. [ABSTRACT FROM AUTHOR]

This paper conducts quasi-experiment design with Chinese listed companies microdata to investigate the effect and mechanism of corporate participation in carbon emission trading market on firm financial performance by using the staggered difference-in-differences method. We show that: a) corporate participation in carbon emission trading market can enhance firm financial performance; b) an increase in green innovation ability and a decrease in strategic choice variance both partially mediate the relationship between carbon emission trading and firm performance; c) executive background heterogeneity and external environmental uncertainty moderate the relationship between carbon emission trading and firm performance in different directions; d) our further study indicates that carbon emission trading pilot policy has a spatial spillover effect on firm financial performance in the neighboring provinces. Therefore, we recommend that the government and enterprises make an effort to further stimulate the vitality of corporate participation in carbon emission trading market. [ABSTRACT FROM AUTHOR]

With ambitious emission reduction targets presented in the international commitments, Vietnam has a pathway to implement an emission trading scheme (ETS) to curb its carbon emissions. However, research on the impacts of ETS in Vietnam is still unclear, especially since there is no study on ETS revenue redistribution policies. By developing a computable general equilibrium (CGE) model, this paper simulates the potential impacts of the ETS with different revenue redistribution options. The results indicate that to achieve Vietnam's target of 15.8% carbon emission reduction, the carbon price would significantly affect the economy with a GDP drop of 3.7% and a welfare loss of 2.89% of GDP. The revenue redistribution policies would lighten these negative impacts. While transferring to government activities reduces GDP loss, reducing income tax policy results in welfare improvement. At the sectoral level, the electricity sector is most negatively affected and also plays a key role in reducing carbon emissions in Vietnam. The revenue redistribution for government activities could improve outputs for the construction and some heavy industries while the revenue redistribution policy for households creates improvements for light industries and the electricity industry. [ABSTRACT FROM AUTHOR]

The interaction between the government's carbon reduction policy and a firm's product strategy has not been well studied in the literature. This paper considers the government's two different carbon quota allocation policies for the cap-and-trade scheme and the firm's two product strategies and investigates the interaction between them by establishing a theoretical model and deriving the optimal decisions. This paper first examines the firms' selection of low-carbon products or ordinary product strategies under the government's two carbon quota allocation policies and then studies the government's optimal carbon quota allocation policy for overall social welfare, which is based on the firm's two product strategies. Our analysis reveals that (i) when the government allocates carbon quotas aimed at reducing the firm's total carbon emissions, the firm will choose the low-carbon product strategy. When the government allocates a carbon quota aimed at optimal total social welfare, the firm's decision depends on the impact of total carbon emissions. (ii) To achieve optimal social welfare, the government will formulate different carbon quota allocation policies on the basis of firms' different product strategies. [ABSTRACT FROM AUTHOR]

In the face of global climate change challenges, China's implementation of the carbon emission trading (CET) pilot policy has provided new empirical research opportunities. Based on a dataset covering 281 Chinese cities from 2005 to 2021, this paper employs econometric models to conduct an in-depth analysis of the policy's impact on urban green innovation (UGI). The findings indicate that the CET pilot policy has significantly promoted green innovation activities in affected cities, with positive effects observed both directly in pilot cities and indirectly in non-pilot cities through spatial spillover effects. In addition, the policy has been found to encourage technological investment and enhance public environmental awareness (PEA), further advancing green innovation. The paper also unveils comprehensive policy effects, indicating that the Big Data Comprehensive Test Zone policy and the New Energy Demonstration City policy work synergistically with the CET pilot policy in advancing green innovation. These findings provide valuable experiences and insights for designing environmental policy tools at the national level, promoting green development, and constructing climate change response strategies. [ABSTRACT FROM AUTHOR]

In the context of the global response to climate change, the shipping industry is facing unprecedented pressure and challenges to reduce emissions. Under the unified leadership of International Maritime Organization (IMO), the international community has begun to take actions to promote the development of the shipping industry in a more environmentally friendly and sustainable direction. As an IMO category (a) member, China is promulgating a series of emission reduction policies to guide the green transformation of its shipping industry. This study first examines China's recent shipping emission reduction policy post "dual carbon" proposal, assessing its key focus and the current efficacy of China's shipping emission reduction governance. Based on this, the study examines the challenges China face in reducing shipping emissions. By drawing on global emission reduction practices, we suggest policy measures for China to enhance its efforts and help the shipping industry move towards achieving netzero emissions. [ABSTRACT FROM AUTHOR]

High-quality green innovation plays a significant strategic support role in high-quality economic developments. Drawing upon institutional theory and property rights theory, this paper investigates the drivers of green innovation quality (GIQ) from the perspectives of formal and informal institutions. Emissions Trading Schemes (ETS) represent formal institutions designed and implemented by governments, while Corporate Social Responsibility (CSR) represents informal institutions. The study finds that ETS significantly enhances GIQ. Moreover, CSR significantly and positively moderated the relationship between ETS and GIQ, indicating that the synergistic interaction between formal and informal institutions stimulates superior innovation quality. This paper contributes to the understanding of the relationship among government regulations, corporate ethics and responsibility, and innovation quality. This paper offers recommendations for environmental policy and management strategies. [ABSTRACT FROM AUTHOR]

The carbon emissions trading market is an essential tool for addressing climate change. The carbon emissions trading market has a relatively short history, and the research and management of risks in this market require further development. This paper takes as its research object 1272 pieces of English literature studies published by international scholars and featured on the Web of Science between 2002 and 2024. It uses CiteSpace software to categorize changes in the trends related to carbon market risk research based on time, space, and keyword clustering mapping. The results reveal the following: (1) In terms of the timeline, the risk evolution of the international carbon market is divided into an embryonic period (2002–2007), a developmental period (2008–2018), and a prosperous period (2019–2024); (2) from the perspective of spatial distribution, carbon market risk research institutions are multipolar, with China, the United States, and the United Kingdom, among other countries, issuing more studies on the topic; these studies mainly emerge from universities and research institutions; and (3) in terms of research hotspots, they revolve around four disciplinary issues, namely, primary research related to carbon market risk, carbon market risk categories, carbon market risk measurement, and response programs. [ABSTRACT FROM AUTHOR]

This paper uses a multisector, multiregional general equilibrium input-output model to study the spillovers of global carbon pricing to Germany and Europe. It uses the World Input-Output Database (WIOD) to calibrate the intersectoral trade between seven regions and 56 economic sectors per region as well as EXIOBASE's sectoral accounts of greenhouse gas emissions to calibrate emission costs. We find that moving from European-only to global carbon prices does neither reduce nor increase the aggregate GDP loss for Germany or Europe as a whole. However, this masks a large degree of heterogeneity across sectors. Sectors that rely on foreign sectors, which are themselves sensitive to the transition, experience large negative spillovers from global carbon pricing. Other sectors, even those with a high emission or trade intensity, tend to benefit from global carbon pricing due to an improvement in international competitiveness. [ABSTRACT FROM AUTHOR]

Keeping carbon in the loop within the technosphere is a promising idea from a technical perspective when striving for climate‐neutral production. Reporting obligations for greenhouse gases have been focused on release into the atmosphere, often under the tacit assumption that any greenhouse gas (GHG) formed will eventually be emitted. Technologies that build on carbon capture face a situation where regulations are lacking terms to describe processes that produce or use carbon dioxide but do not release it. This work aims to highlight this situation and to provide suggestions to overcome some of the hurdles. [ABSTRACT FROM AUTHOR]

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This study evaluates the efficiency of China's seven emission trading schemes (ETS) piloted in 2013. We evaluate seven pilots' overall technical and scale efficiencies and temporal dynamics during 2014–2023. We use a bootstrap correction data envelopment analysis (bootstrap-DEA), which guarantees a more accurate efficiency estimation than the traditional DEA model. The results show that the average overall (pure technical) efficiency of the seven pilot markets increased from 0.612 (0.844) in 2014 to 0.898 (0.990) in 2023. Furthermore, we document that seven ETS pilots differ remarkably in efficiency and transaction price, whilst all have shortages. Specifically, the small-scale market transaction is the main constraint effect on the average scale efficiency of the ETS. This study provides concrete recommendations for policy makers to consummate institutional designs to improve ETS efficiency. [ABSTRACT FROM AUTHOR]

In this paper, a two-stage robust optimization approach is employed to address the variability in renewable energy output by accounting for the uncertainties associated with wind and solar energy. The model aims to achieve a balanced system that is both low-carbon and economically efficient while also being resilient to uncertainties. Initially, a regional integrated energy system model is developed, integrating electricity, gas, and heat. The variability of wind and photovoltaic power outputs is represented using a modifiable uncertainty set. A resilient optimal scheduling model is formulated in two stages, with the objective of minimizing costs under worst-case scenarios. This model is solved iteratively through a column and constraint generation approach. Additionally, the scheduling model incorporates horizontal time shifts and vertical complementary substitutions for carbon trading costs and demand-side loads to avoid excessive conservatism and to manage carbon emissions and energy trading in the regional integrated energy system (RIES). Results show that the two-stage robust optimization approach significantly enhances the system's resilience to risks and minimizes economic losses. The inclusion of carbon trading mechanisms and the demand response prevents the system from becoming overly robust, which could impede economic growth, while also reducing carbon emissions. The proposed method effectively achieves balanced optimal scheduling for a robust, economical, and low-carbon system. [ABSTRACT FROM AUTHOR]

In this paper, we propose a novel approach to study the production of consumption goods within a price floor carbon emission trading scheme. A stochastic Stackelberg game is set up between the environment authority (Player 1), and the manufacturer/producer (Player 2). In such a hybrid emission trading scheme, the authority sets an emissions target and producers will choose to participate in carbon trading on this basis, subject to a stochastic demand with information delayed. When the stochastic demand is determined by the market sale price and the scale of carbon emission reduction, we apply the maximum principle to obtain both the optimal production and market price. We show when the demand is determined by both the market sales price and carbon emission reduction, manufacturers are persuaded to set the market sales price first (ex ante incentive) and then proceed to a carbon trading scheme, thus providing a backward-looking advantage to manufacturers. Consequently, the manufacturer and the environmental authority can find a subgame-perfect Nash equilibrium via backward induction. [ABSTRACT FROM AUTHOR]

This paper presents the development of a model incorporating two manufacturers in a competitive carbon emissions trading market with varying degrees of market competitiveness. Among them, the manufacturer is in a limited market leadership position, and the game process lies between the Stackelberg game and the Cournot game. Additionally, the Pareto solution sets at various model periods are investigated. In addition, the model examined the effect of dynamic government adjustments on carbon emission limitations. The paper conducts an analysis of the fundamental factors contributing to system instability and evaluates the influence of various factors on the model's stability. At the same time, we also discussed the influence of government adjustment strategy on retail decision‐making and stability. The results highlight that the instability of the system is mainly caused by the adjustment strategy of the market leader, whereby the system becomes increasingly unstable as the market leader's position becomes stronger. In addition, the government's implementation of carbon emission limits will promote market stability. [ABSTRACT FROM AUTHOR]

Despite the negative externalities on the environment and human health, today's economies still produce excessive carbon dioxide emissions. As a result, governments are trying to shift production and consumption to more sustainable models that reduce the environmental impact of carbon dioxide emissions. The European Union, in particular, has implemented an innovative policy to reduce carbon dioxide emissions by creating a market for emission rights, the emissions trading system. The objective of this paper is to perform a counterfactual analysis to measure the impact of the emissions trading system on the reduction of carbon dioxide emissions. For this purpose, a recently-developed statistical machine learning method called matrix completion with fixed effects estimation is used and compared to traditional econometric techniques. We apply matrix completion with fixed effects estimation to the prediction of missing counterfactual entries of a carbon dioxide emissions matrix whose elements (indexed row-wise by country and column-wise by year) represent emissions without the emissions trading system for country-year pairs. The results obtained, confirmed by robust diagnostic tests, show a significant effect of the emissions trading system on the reduction of carbon dioxide emissions: the majority of European Union countries included in our analysis reduced their total carbon dioxide emissions (associated with selected industries) by about 15.4% during the emissions trading system treatment period 2005–2020, compared to the total carbon dioxide emissions (associated with the same industries) that would have been achieved in the absence of the emissions trading system policy. Finally, several managerial/practical implications of the study are discussed, together with its possible extensions. [ABSTRACT FROM AUTHOR]

Copyright of Zhejiang Electric Power is the property of Zhejiang Electric Power Editorial Office and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Based on the carbon emissions trading pilot policy in China, this paper takes Chinese A‐share listed companies from 2012 to 2020 as a sample, and analyzes the role of company's cost transfer capability (ECTC) in the mechanism of market‐incentivized environmental regulation policy (MERP) influencing company green transformation. This paper finds the following four primary results. First, ECTC significantly strengthens the green transformation driving effect of MERP in general. However, results based on the division of ECTC by percentiles show that MERP‐induced green transformation is more pronounced in the top 25% of companies, which distinguishes them from companies in the top 25%–50%, whose cost transfer capacity hampers MERP's contribution to the green transformation. Second, the level of regional economic development, emission regulation, and business reputation have heterogeneous influences on the moderating effect of ECTC. Third, the results based on the moderated mediation model show that ECTC can influence the green transition driving effect of MERP by moderating the two paths of risk‐taking ability and financing constraints of companies. Finally, there is a diffusion effect on the green transformation driven by MERP through cost transfer among companies in non‐pilot industries and non‐pilot regions. [ABSTRACT FROM AUTHOR]

In the current literature, there exists a lack of analysis regarding the coordination of the spinning reserve and time-shift characteristics of hydrogen storage systems (HSS) and flexible carbon capture systems (FCCS) in terms of low-carbon economic operation. They are presently used solely as a tool to capture carbon dioxide, without fully utilizing the advantages of their flexible operation. The coordination and complementarity of the FCCS and HSS can ensure stable power supply and improve renewable energy (RE) consumption. Combined with demand side response (DSR), these factors can maximize the RE consumption capacity, reduce carbon emissions, and improve revenue. In this paper, a source-storage-load flexible scheduling strategy is proposed by considering the complementary nature of FCCS and HSS in terms of rotating standby and time-shift characteristics. First, the operational mechanisms of FCCS, HSS, and demand side response (DSR) are analyzed, and their mathematical models are constructed to improve flexibility in grid operation and regulation. Next, deficiencies in FCCS and HSS operation under rotating reserve requirements are analyzed to design a coordinated operation framework for the FCCS and HSS. This operational framework aims to enable the complementarity of the rotating reserve and time-shift characteristics of FCCS and HSS. Finally, based on the carbon emission trading mechanism, a three-stage ladder carbon emission trading cost model is constructed, and a source-storage-load flexible scheduling strategy is established to achieve an effective balance between low carbon emissions and economic performance. The simulation results demonstrate that the strategy reduces the overall cost by 8.57%, reduces the carbon emissions by 35.33%, and improves the renewable energy consumption by 3.5% compared with the unoptimized scheme. [ABSTRACT FROM AUTHOR]

To address the growing demand for green development, governments worldwide have introduced policies to promote a green economy. Among these policies, the carbon cap-and-trade mechanism is adopted as an effective approach to control carbon emissions. Additionally, blockchain may increase transparency in the industrial process. Despite focusing on improving its own green standards, the supply chain needs to establish stable cooperative relationship. Thus, we focus on a supply chain consisting of a dominant manufacturer and a retailer, where the manufacturer opts for implementing blockchain and the retailer selects their stance on fairness. We construct a Stackelberg game model and use backward induction to obtain the equilibrium solutions. In the supply chain, the highest profits can be achieved when the manufacturer adopts blockchain technology, provided that the cost of application is relatively low. For manufacturer and retailer, when the cost of applying blockchain is relatively low, they can both obtain maximized profits without applying blockchain and the retailer does not have fairness concerns. However, as the cost of inducing blockchain and the product's reduction in carbon emission increase, the optimal strategies for manufacturer and retailer begin to diverge, which may affect the stability of the supply chain. [ABSTRACT FROM AUTHOR]

Due to climate change and the urgent need to reduce the greenhouse gas emissions of industrial processes, decarbonizing energy‐intensive industries is highly important. In Europe, emissions trading is the main regulatory instrument providing incentives to replace conventional production facilities with low‐carbon alternatives. Using the example of primary steelmaking, this study aims to evaluate the impacts of product benchmark revisions on the transformation of integrated steel mills. To this end, an optimization model for the strategic planning of economically favorable transformation pathways is developed. The model is combined with a prospective assessment of economic and climate impacts from steelmaking processes. By applying the model to a case study from Germany, legislative conditions in which steel manufacturers are encouraged to transform their production infrastructure are identified. Based on current regulations on product benchmarks for steelmaking, investments into low‐carbon technologies are slowed down until allocations of emissions allowances expire. However, benchmark revisions have the potential to speed up transformation plans significantly. In the analyzed scenarios, the greenhouse gas emissions of primary steelmaking between 2024 and 2034 decreased by up to 15%. These results are further strengthened by sensitivity analyses on the main market influences. Hence, this study provides policy recommendations on favorable revisions of product benchmarks for primary steelmaking. [ABSTRACT FROM AUTHOR]

Under the background of "carbon peak and carbon neutrality", the interconnection of multiple regional integrated energy systems has become an important way to coordinate multiple energy sources and save energy and reduce emissions. This paper proposes a low-carbon economic dispatch model for multi-regional integrated energy systems considering the joint demand response mechanism; first, the concept and model of joint demand response are proposed, and on this basis, the energy conversion model between multiple energy forms in the multi-regional integrated energy system is studied; secondly, green certificate trading and carbon trading mechanisms are introduced, and green certificate trading and carbon trading are combined through the green certificate emission reduction mechanism; finally, a low-carbon economic dispatch model is proposed with the goal of minimizing the sum of system energy purchase cost, green certificate trading cost, carbon trading cost and joint demand response compensation cost. The example results show that the introduction of joint demand response mechanism and green certificatecarbon trading mechanism in the multi-regional integrated energy system reduces the total system cost and carbon emissions by 14.03% and 26.04% respectively. [ABSTRACT FROM AUTHOR]

The objective of this research is to systematically compare the impact of macro determinants on CO2 emissions, using the theoretical frameworks of trade, the Environmental Kuznets Curve, and the Pollution Haven Hypothesis. The study specifically focuses on high‐ and low‐trade‐openness economies from 1995 to 2020. Methodologies employed include stepwise regression, fully modified least squares, pooled ordinary least squares, and fixed effects models. Long‐run dynamics were assessed using Granger causality tests and Pedroni and Johansen cointegration tests. The results indicate both long‐term and short‐term relationships between CO2 emissions and the following variables: (i) gross capital formation (GCF), (ii) per capita income (PCI), (iii) population (POP), and (iv) trade openness. Trade openness has a positive and significant effect on CO2 emissions in highly trade openness economies, whereas it has a negative effect in low trade‐open economies. Highly open economies are more significantly impacted by GCF and POP on CO2 emissions compared with low‐ trade openness economies. Additionally, PCI positively and significantly influences CO2 emissions in low‐ trade openness countries, and this effect is greater than in high‐ trade openness economies. The study also identifies a bidirectional causal relationship between PCI, GCF, and CO2 emissions in both groups of economies, as well as a unidirectional relationship between trade openness, POP, and CO2 emissions in both high‐  and low‐ trade openness countries. [ABSTRACT FROM AUTHOR]

EU recently decided to include shipping, meaning all intra-European shipping and 50% of extra-European voyages, in the EU Emissions Trading System (ETS) beginning in 2024. This article provides an early assessment of the impacts of the EU ETS on the shipping sector's potential reductions in greenhouse gas emissions for different types of ships. It further examines selected mitigation measures and the impact on modals split and costs. The study employs a mixed-methods approach combining quantitative estimates (based on data from the EU monitoring, reporting and verification system) with qualitative data and information from interviews with key actors and from previous literature. This approach aims to provide a comprehensive understanding of the impacts of the EU ETS. The inclusion of shipping in the EU ETS is expected to introduce significant incentives to reduce emissions. We estimate that switching to bio-methanol at an emissions allowance price of €90–100/tCO2 will be cost-effective for a minor share of shipping segments (representing about 0.5-5% of all ships), whereas at a price above €150/tCO2 it could be cost-effective for a considerable share (potentially 75%) of ships. In the short term, the costs incurred by the EU ETS will be passed on to transport customers as a surcharge. The increased cost may, unless properly addressed, drive carbon leakage. Meanwhile, a modal shift away from shipping may occur in the roll-on, roll-off (RoRo) and roll-on passenger (RoPax) segments due to direct competition with road and rail transport and the relative ease of shifting to other modes of transport. Integrating shipping into the EU ETS is an important step towards reducing GHG emissions in the sector but also will reduce emissions of NOX, SOX, and PM. CO2 emissions from shipping constitute about 8% of GHG emissions from all sectors in the EU ETS. The need to purchase allowances will increase operating costs, which will initially be passed on to transport customers as a surcharge. Interviews confirm that a modal shift away from shipping to road and rail may occur in the RoRo and RoPax segments. Switching to bio-methanol may be cost-effective mainly for some ships in the RoRo, RoPax and reefer segments at an allowance price below €100/tCO2, while for most ships (about 85–100% of ships) it will be cost-effective above €200/tCO2. [ABSTRACT FROM AUTHOR]

This paper constructs a unique dataset of clean energy and collects firm-level green innovation data that matches it with provinces and cities. Then, this paper executes quasi-natural experiments on green innovation to examine the effects of China's emission trading policy on green innovation. Further, this paper introduces the interactive terms of the pilot time and pilot area dummy variables into the spatial Durbin model (SDM) and spatial dynamic panel model (SDPM) to construct quasi-natural experiments to examine the spatial effect. The findings confirm a negative association between the 'policy treatment effect' and green innovation. The results also indicate a significant negative association between the emissions trading policy and clean energy. Besides, the empirical results reveal a positive correlation between clean energy and green innovation; clean energy promotes green innovation in the region and the surrounding areas. This paper complements existing research and provides empirical evidence and policy implications for developing clean energy, promoting green innovation, and improving the emission trading policy. [ABSTRACT FROM AUTHOR]

This study investigates the causal relationship between technology innovation and carbon emissions based on data from firms participating in the Korean Emission Trading Scheme (KETS). It is considered that the dynamics of firm innovation and environmental performance vary by industry group because each industry utilizes a different production process and carbon reduction ability. Therefore, in this study, the causal relationships between innovation and emissions are analyzed and compared by industry based on the panel vector error correction model (VECM) and the fully modified OLS procedures (FMOLS). The results show that innovation activities play an important role in promoting the environmental performance of firms at the 5% significance level in the long -run. On the other hand, a firm's sales that represent production activities increase carbon emissions both in the long and short-run. Comparative analysis between industries confirms that the dynamics vary by industry. R&D investments have a significant effect on carbon emissions reduction in the energy industry in the short run, but in the high technology industries such as semiconductors and electronics, environmental regulation plays an important role in inducing technological progress in the short run. [ABSTRACT FROM AUTHOR]

In response to the international appeal of developing low-carbon economy and realizing carbon peaking and neutrality goals, China has been exploring the construction of the carbon emissions trading market for years. Without the guidance of advanced technology, there would not be a low-carbon economy in the first place. Based on panel data of 30 provinces and cities in China from 2005 to 2020, this paper takes Beijing—which is the first pilot city in China—as the only treated group and uses the Synthetic Control Method to study the impact of the pilot policy on low-carbon technology innovation. The results show that, firstly, the number of low-carbon technology patents in Beijing increases significantly after the implementation of the pilot policy, proving a positive influence on technology innovation. Secondly, the policy effect has a certain time lag and is sensitive to the shock from both domestic and foreign carbon market, but this effect is gradually stable over time. This paper confirms that technological innovation is the key means of promoting the development of the low-carbon economy and calls on various carbon trading markets to pay attention to the internal mechanism of promoting low-carbon technology innovation to stimulate the vitality of market entities. [ABSTRACT FROM AUTHOR]

We establish a general-equilibrium model to compare the efficiency of two emission regulation policies used worldwide: the carbon tax (CT) and the emission trading scheme (ETS). Assuming monopolistic competition and heterogeneous firms, we show that the ETS is better in an economy with a high degree of heterogeneity, and the CT is better otherwise. We also explore how the market distortions under these two regulation policies are different. Moreover, we find that the excessive input of an immobile resource in manufacturing production may result in market inefficiency. [ABSTRACT FROM AUTHOR]

The interactive behaviors, such as competition and learning between local and neighboring cities, can lead to spatial spillover effects in policy implementation. Estimating the direct, indirect, and total effects of the carbon emission trading scheme (CETS) on green innovation is crucial to clarify its role and mechanisms. This paper applies the spatial difference-in-differences model to estimate these effects using data from 278 cities in China from 2009 to 2019. The results demonstrate that the CETS implementation catalyzes green innovation in pilot cities, which supports the Porter hypothesis. However, it has a negative impact on green innovation in neighboring cities of pilot cities, with this negative impact diminishing as distance increases. Notably, the total effect of the CETS is significantly negative, indicating that the CETS's average impact on green innovation in all cities is negative. Mechanism analysis reveals that the direct and indirect effects of the CETS on green innovation are strengthened in cities with higher levels of financial development, lower financial pressure, and easier economic growth targets. Notably, in cities with high-level industrial structures, the CETS not only enhances its contribution to green innovation but also mitigates its negative impact on neighboring cities. Furthermore, this paper explores the heterogeneous effects of the CETS from the perspective of its implementation measures. [ABSTRACT FROM AUTHOR]

The augmentation of transactional volume within carbon emissions trading systems (ETS) is widely acknowledged as an efficacious mechanism for ensuring the efficient distribution of resources and financial support to corporations, significantly influencing their financing limitations. Despite its relevance, this subject has garnered scant attention in scholarly discourse. This research utilizes a panel dataset comprising Chinese listed firms from 2009 to 2019, applying the difference-in-differences approach to examine the correlation between the magnitude of carbon emissions trading in regional ETS pilots and the evolution of financial constraints. Our analysis reveals that a 1% escalation in carbon transaction volume correlates with a 0.1885% reduction in the financial constraints encountered by companies. This phenomenon is particularly salient among smaller enterprises in the eastern provinces and second-tier urban centers, and those engaged in the primary and secondary sectors. Moreover, our principal results demonstrate resilience across various sensitivity analyses, encompassing common trend scrutiny and alternative methodologies like propensity score matching estimation. The research further delves into the underlying mechanisms by which carbon trading can mitigate a firm's fiscal pressures. Our examination identifies investment in intangible assets, improved carbon performance, and liquidity enhancement as key conduits. These findings carry substantial policy implications, advocating for governmental initiatives to bolster corporate engagement in ETS, thereby easing financial burdens while concurrently advancing environmental regulation and low-carbon transformation objectives. [ABSTRACT FROM AUTHOR]

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Increasing strict carbon regulations enforced by regulators are encouraging companies to seek better ways to manage inventories with a desire to reduce carbon emissions from their operations. This work illustrates an inventory model to obtain the retailer's optimal replenishment policy for non-instantaneous deteriorating items with fixed lifetime and partial backordering under cap-and-price, cap-and-trade, and carbon tax regulations with the goal of maximizing a retailer's profit while simultaneously reducing total carbon emissions. To investigate the work from a more general perspective, the market demand structure of perishable products is considered deterministic in nature and is reliant on both the selling price and stock level, while the shortage of items is a decreasing function of waiting time up to the next replenishment. This study examines, for the first time, the best replenishment decisions for non-instantaneous deteriorating items with an expiration date after characterizing their properties theoretically under carbon regulations. Integrating all possible cases of the optimal solutions from theoretical outcomes, different numerical examples are demonstrated, and finally, several management insights are provided by investigating the changing pattern of the optimal strategies for variation in the system parameters. The derived outcomes highlight that the cap-and-price policy performs well both economically and environmentally for the inventory decision-maker when the penalty is less than or equal to the reward for each unit of carbon emission. Furthermore, in cap-and-price regulation, the total profit is increased by 3.14 % , 8.10 % , and 1.63 % from cap-and-trade, carbon tax, and without carbon regulation, respectively, and the total amount of emission is decreased by 5.38% from cap-and-trade and carbon tax regulation. [ABSTRACT FROM AUTHOR]

The article analyses the Renewable Energy Sources Act (EEG) and the climate protection agreements, focusing on three aspects: Firstly, very high costs of CO2 avoidance that have to be paid over decades and limit the room for manoeuvre of future parliaments. Secondly, the promotion of technical progress in climate protection – possibly beyond the effect of permanently rising CO2 prices. Thirdly, lower CO2 emissions in Germany, which do not lead to lower global emissions through the EU-ETS. Overall, it is highly questionable whether Germany can play a leading international role in climate protection through the EEG and climate protection agreements. [ABSTRACT FROM AUTHOR]

With the German Energy Efficiency Act, politicians are intervening directly in business activities by imposing energy-saving requirements. The act sets precise targets for future energy consumption in Germany as a whole and obliges companies above a certain energy consumption level to set up energy management systems or to draw up implementation plans for energy-saving measures identified as economically viable. Government bodies have an annual obligation to save energy; this is unnecessary, as the relevant signals for energy savings result from EU emissions trading. It is also dysfunctional, as it undermines entrepreneurial freedom of action and leads to a de facto planned climate economy. [ABSTRACT FROM AUTHOR]

Renewable energy innovations are imperative to tackle the climate change crisis. However, there is a gap in the literature regarding the effectiveness of environmental policies in promoting renewable energy innovations. To bridge this gap, we have adopted a systematic literature review process covering the period from 2005 to 2023. We identified and analysed 29 articles in our final sample. Further, we employ two levels of analysis (individual‐policy and policy‐mix levels) for analysing the extant research. Our findings show that fiscal incentives and emissions trading policies such as the European Union (EU) Emissions Trading System (ETS) consistently promote renewable energy innovations. In contrast, the effectiveness of feed‐in tariffs and quotas in supporting renewable energy innovations varies, reflecting diverse impacts across distinct regions and renewable energy technologies. Our analysis also suggests that combinations of various policy types can enhance innovation more effectively than individual policies. We contribute to the extant literature by developing a classificatory analysis of the effect of environmental policies on renewable energy innovations. Our review also provides research directions for future scholarship. [ABSTRACT FROM AUTHOR]

While countries increasingly commit to pricing greenhouse gases directly through carbon taxes or emissions trading systems, indirect forms of carbon pricing—such as fuel excise taxes and fuel subsidy reforms—remain important factors affecting the mitigation incentives in an economy. Taken together, how can policy makers think about the overall price signal for carbon emissions and the incentive it creates? We develop a methodology for calculating a total carbon price applied to carbon emissions in a sector, a fuel, or the whole economy. We recognize that rarely is a single carbon price applied across an economy; many direct carbon pricing instruments target specific sectors or even fuels, much like indirect taxes on fossil fuels; and carbon and fuel taxes can be substituted for one another. Tracking progress on carbon pricing thus requires following both kinds of price interventions, their coverage, and specific exemptions. This inclusive total carbon pricing measure can facilitate progress in discussions on minimum carbon price commitments and inform assessments of the pricing of carbon embodied in traded goods. Calculations across 142 countries from 1991 to 2021 indicate that although direct carbon pricing now covers roughly one-quarter of global emissions, the global total carbon price is not that much higher than it was in 1994 when the United Nations Framework Convention on Climate Change entered into force. Indirect carbon pricing still comprises the lion's share of the global total carbon price, and it has stagnated. Taking these policy measures into account reveals that many developing countries—particularly net fuel importers—contribute substantially to global carbon pricing. Tackling fuel subsidy reform and pricing coal and natural gas emissions more fully would have a profound effect on aligning carbon prices across countries and sectors and with their climate costs. [ABSTRACT FROM AUTHOR]

The Low Carbon Fuel Standard (LCFS) plays a critical role in California’s efforts to reduce greenhouse gas (GHG) and air pollutant emissions from transportation. The LCFS incentivizes the use of fuels with lower life cycle GHG emissions by using a credit market mechanism to provide incentives for low-carbon fuels, using revenue generated by charges applied to high-carbon ones. Maintaining an approximate balance between LCFS credit and deficit supplies helps support a stable LCFS credit price and the broader transition to low-carbon transportation. The Fuel Portfolio Scenario Model, presented here, evaluates bottom-up fuel supply and LCFS compliance to inform LCFS policy decisions. We considered two key fuel demand scenarios: (1) the Low Carbon Transportation scenario, reflecting the expected transition to low-carbon transportation in California over the next 15 years, and (2) the Driving to Zero scenario, featuring a significantly higher consumption of petroleum gasoline. In both scenarios, 2030 LCFS targets around 30% resulted in a near-balance between credits and deficits, with some banked credits remaining. Several additional scenarios were modeled to explore the impact of target trajectory timing, alternate post-2030 targets, greater biofuel use, and other parameters. This fuel portfolio scenario modeling work can meaningfully inform policy development.