China’s carbon emission trading pilot policy and china’s export technical sophistication: Based on did analysis

Abstract

This paper takes China’s carbon emission trading pilot policy as a quasi-natural experiment, and adopts a difference-in-difference approach and data from 30 provinces in China from 2008 to 2016 to empirically study the influence of this policy on China’s export technical sophistication. The empirical analysis revealed that the policy can generate a Porter effect and progressively promote China’s export technical sophistication by reinforcing carbon productivity. By analyzing the regional heterogeneity and influence channels, the policy is found to work better in the central-western region than in the eastern region. The reason for this finding is that the policy has brought innovation offset effects to the central-western region and increased carbon productivity, but the policy has not improved carbon productivity in the eastern region. By studying the effect of three measures of policy implementation on export technical sophistication, we found that restricting carbon emission quotas distributed to participating enterprises is necessary. In addition, we found that the financial punishment method for non-performance is advantageous to the enhancement of export technical sophistication. These research conclusions can provide directions and policy recommendations for upgrading the emissions trading market, as well as a learning case and some experience for countries that have not yet established carbon trading markets.