Does regional carbon market construction promote urban carbon emission efficiency?—taking Fujian carbon emissions trading system as an example

ABSTRACT

Carbon market construction is a crucial tool in meeting sustainable development goals (SDGs). Based on data from prefecture-level cities in Fujian Province, China, between 2011 and 2020, the SBM model is employed to determine the carbon emission efficiency for each city. Additionally, the event analysis method is deployed to evaluate the influence of the carbon market construction on carbon emission efficiency in Fujian Province, and project carbon emission efficiencies for different scenarios. The findings reveal that: (1) The construction of the carbon market has led to an improvement in carbon emission efficiency in Fujian Province, the duration of this effect needs to be strengthened. (2) No significant difference has been observed in carbon emission efficiency between coastal and inland cities due to the carbon market construction. It is feasible to investigate the formation of a carbon market with distinct local features, ultimately achieving SDGs.

KEYWORDS:

• Carbon market
• event analysis method
• SBM model
• efficiency assessment

JEL:

• Q54
• Q58
• L51

Acknowledgments

We acknowledge the financial support from the Fujian Provincial Innovation Strategy Research Program Project (No. 2023R0132), the Major Program of the National Fund of Philosophy and Social Science of China (No. 21&ZD109), Basic Scientific Center Project of National Science Foundation of China (No.71988101), the Fundamental Research Funds for the Central Universities concerned Chinese modernization (No.20720231061), and National Natural Science Foundation of China (No.72074186).

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Data source: Relevant reports of Fujian Provincial Department of Ecology and Environment.

2. Data source: Fujian Statistical Yearbook, collated.

3. Data source: International Carbon Action Partnership (ICAP).

4. Post-2018 data of fixed asset investment are estimated from growth ratios.

5. Data source: Organized by the website of the Fujian Provincial Government, China.

6. Carbon stands for carbon emissions, which have been logarithmized; TE stands for carbon emission efficiency. The same variable notation is used for what follows.

7. EE stands for energy input efficiency; CE stands for carbon output redundancy efficiency. The same variable notation is used for what follows.

8. This part of the energy industry development information from the ‘Fujian Province’ 13th Five-Year Plan for Energy Development” (Fujian Government Office [2016] No. 165).

9. Regarding the economic objective, this paper follows the preset target on the scale of economic development in the 2022 government work report of each city in Fujian Province, and assumes that the development of each place has an exponential and uniform growth. Regarding the ecological objectives, this paper synthesizes the policy documents of the State Council of China and Fujian Province on the targets of non-fossil energy use, energy consumption and carbon emission reduction, and sets the key parameters.

Additional information

Funding

This work was supported by the Fujian Provincial Innovation Strategy Research Program Project [No. 2023R0132]; Major Program of the National Fund of Philosophy and Social Science of China [No. 21&ZD109]; National Natural Science Foundation of China [No.72074186]; Fundamental Research Funds for the Central Universities concerned Chinese modernization [No.20720231061]; Basic Scientific Center Project of National Science Foundation of China [No.71988101].