Synergistic Effect of Carbon Trading Scheme on Carbon Dioxide and Atmospheric Pollutants

Abstract

To estimate the synergistic emission reduction effect resulting from carbon emissions trading scheme (ETS) pilots launched in 2013, this study estimated the synergistic emission reduction relationship between carbon dioxide (CO₂) and atmospheric pollutants, consisting of sulfur dioxide (SO₂), nitrogen oxides (NO_X), dust pollutants (Dust) and particulate matter 2.5 (PM_2.5). Using the extended logarithmic mean Divisia index (LMDI) method and the IPAT equation, the synergistic emission reduction effect was decomposed into direct and indirect categories driven by energy efficiency, economic development and industrial structure. Moreover, the synergistic emission reduction effect of ETS pilots was quantified with the difference-in-differences method (DID) and propensity score matching difference-in-differences method (PSM-DID). The results show that, from 2013 to 2016, CO₂ and atmospheric pollutants achieved emission reduction synergistically through ETS, among which the synergistic emission reduction effect between CO₂ and SO₂ was most significant. Compared with the direct category, the indirect category accounted for smaller proportion of the synergistic emission reduction effect. The combined action of energy efficiency and industrial structure has a potential positive influence on synergistic emission reduction effect of ETS. Consequently, this suggests that the government needs to develop the domestic carbon market further, improve energy efficiency and optimize industrial structure to promote synergistic emission reduction.