Pub Date : 2025-12-05DOI: 10.1016/j.eneco.2025.109078
Darryl Biggar , Mohammad Reza Hesamzadeh
Electric power systems are increasingly turning to energy storage systems to balance supply and demand. But how much storage is required? What is the optimal volume of storage in a power system and on what does it depend? In addition, what form of hedge contracts do storage facilities require? We answer these questions in the special case in which the uncertainty in the power system involves successive draws of an independent, identically-distributed random variable. We characterise the conditions for the optimal operation of, and investment in, storage and show how these conditions can be understood graphically using price-duration curves. We also characterise the optimal hedge contracts for storage units.
{"title":"The theory of storage in a power system with stochastic demand","authors":"Darryl Biggar , Mohammad Reza Hesamzadeh","doi":"10.1016/j.eneco.2025.109078","DOIUrl":"10.1016/j.eneco.2025.109078","url":null,"abstract":"<div><div>Electric power systems are increasingly turning to energy storage systems to balance supply and demand. But how much storage is required? What is the optimal volume of storage in a power system and on what does it depend? In addition, what form of hedge contracts do storage facilities require? We answer these questions in the special case in which the uncertainty in the power system involves successive draws of an independent, identically-distributed random variable. We characterise the conditions for the optimal operation of, and investment in, storage and show how these conditions can be understood graphically using price-duration curves. We also characterise the optimal hedge contracts for storage units.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109078"},"PeriodicalIF":14.2,"publicationDate":"2025-12-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145696609","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-04DOI: 10.1016/j.eneco.2025.109083
Nicolae Stef , Sami Ben Jabeur
Countries can rely upon decarbonization policies that stimulate the green transition of energy systems to combat global warming. However, such policies can provide financial opportunities to local firms as they lead to changes in the performance of the national energy system. Using a sample composed of 5936 nonfinancial listed firms operating in 42 developing countries over the period 2015–2024, our study investigates how the decarbonization strategies of local authorities affect corporate financial performance. Panel regressions reveal that a more diversified network of energy suppliers contributes to an increase in the financial performance of firms from Southeast Asia and Latin America. Strengthening the decarbonization regulations and the political commitment to energy transition policies leads to high corporate performance in the region of Sub-Saharan Africa. Estimates also pointed out that listed firms from Middle East and North Africa can financially benefit from investments in energy system infrastructure. Interestingly, the mechanisms that could explain the positive effects of such decarbonization policies include reducing operational costs and enhancing firms' capacity to repay their debts.
{"title":"How do decarbonization policies affect a firm's financial performance? Evidence from emergent economies","authors":"Nicolae Stef , Sami Ben Jabeur","doi":"10.1016/j.eneco.2025.109083","DOIUrl":"10.1016/j.eneco.2025.109083","url":null,"abstract":"<div><div>Countries can rely upon decarbonization policies that stimulate the green transition of energy systems to combat global warming. However, such policies can provide financial opportunities to local firms as they lead to changes in the performance of the national energy system. Using a sample composed of 5936 nonfinancial listed firms operating in 42 developing countries over the period 2015–2024, our study investigates how the decarbonization strategies of local authorities affect corporate financial performance. Panel regressions reveal that a more diversified network of energy suppliers contributes to an increase in the financial performance of firms from Southeast Asia and Latin America. Strengthening the decarbonization regulations and the political commitment to energy transition policies leads to high corporate performance in the region of Sub-Saharan Africa. Estimates also pointed out that listed firms from Middle East and North Africa can financially benefit from investments in energy system infrastructure. Interestingly, the mechanisms that could explain the positive effects of such decarbonization policies include reducing operational costs and enhancing firms' capacity to repay their debts.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109083"},"PeriodicalIF":14.2,"publicationDate":"2025-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145689442","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-04DOI: 10.1016/j.eneco.2025.109075
Marcos Escobar-Anel , Kaize Pan , Lars Stentoft
We introduce a new discrete time model for commodity spot prices that integrates mean reversion with time varying volatility. Because of its affine structure, the model delivers closed-form moment-generating functions for spot prices and, with appropriate risk neutralization, a mean-reverting affine representation for future prices under both the historical and risk-neutral measures. This permits analytical pricing of derivatives on the spot and futures contracts. Estimation can be done with maximum likelihood, the reliability of which is confirmed in a simulation study using spot prices and spot and futures prices jointly. An empirical application reveals significant mean reversion and time-varying conditional variance in three selected commodities, and shows that using models without mean reversion or time varying volatility results in much lower fit in terms of likelihood and much larger futures pricing errors both in- and out-of-sample.
{"title":"A mean reverting affine GARCH model for commodities","authors":"Marcos Escobar-Anel , Kaize Pan , Lars Stentoft","doi":"10.1016/j.eneco.2025.109075","DOIUrl":"10.1016/j.eneco.2025.109075","url":null,"abstract":"<div><div>We introduce a new discrete time model for commodity spot prices that integrates mean reversion with time varying volatility. Because of its affine structure, the model delivers closed-form moment-generating functions for spot prices and, with appropriate risk neutralization, a mean-reverting affine representation for future prices under both the historical and risk-neutral measures. This permits analytical pricing of derivatives on the spot and futures contracts. Estimation can be done with maximum likelihood, the reliability of which is confirmed in a simulation study using spot prices and spot and futures prices jointly. An empirical application reveals significant mean reversion and time-varying conditional variance in three selected commodities, and shows that using models without mean reversion or time varying volatility results in much lower fit in terms of likelihood and much larger futures pricing errors both in- and out-of-sample.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109075"},"PeriodicalIF":14.2,"publicationDate":"2025-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145689441","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-02DOI: 10.1016/j.eneco.2025.109080
Thibault Lemaire, Andrea Medici, Giovanni Melina, Gregor Schwerhoff, Sneha Thube
Electricity supply per capita in sub-Saharan Africa (SSA) has gradually declined between 2004 and 2021 and almost half of the population still does not have access to electricity. Research so far has not quantified the prospective benefits from leveraging existing climate finance for investment in renewable energy in a regionally disaggregated model for SSA. This gap is filled to identify how SSA could benefit from the rapid development of renewable energy. A computable general equilibrium (CGE) model is extended, where SSA is represented by five major countries and four regional aggregates, reflecting the specificities of their economies and energy system. Results show that boosting the economy and energy supply in SSA significantly is well within existing climate finance commitments. Investments of the tune of $25 billion per year can boost the annual GDP growth rate 0.8 percentage point and increase electricity generation by about 17 %. At the regional level, outcomes vary by development level, initial state of the energy sector and emission intensity.
{"title":"Electricity access and economic development: Leveraging climate finance in sub-Saharan Africa1","authors":"Thibault Lemaire, Andrea Medici, Giovanni Melina, Gregor Schwerhoff, Sneha Thube","doi":"10.1016/j.eneco.2025.109080","DOIUrl":"10.1016/j.eneco.2025.109080","url":null,"abstract":"<div><div>Electricity supply per capita in sub-Saharan Africa (SSA) has gradually declined between 2004 and 2021 and almost half of the population still does not have access to electricity. Research so far has not quantified the prospective benefits from leveraging existing climate finance for investment in renewable energy in a regionally disaggregated model for SSA. This gap is filled to identify how SSA could benefit from the rapid development of renewable energy. A computable general equilibrium (CGE) model is extended, where SSA is represented by five major countries and four regional aggregates, reflecting the specificities of their economies and energy system. Results show that boosting the economy and energy supply in SSA significantly is well within existing climate finance commitments. Investments of the tune of $25 billion per year can boost the annual GDP growth rate 0.8 percentage point and increase electricity generation by about 17 %. At the regional level, outcomes vary by development level, initial state of the energy sector and emission intensity.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109080"},"PeriodicalIF":14.2,"publicationDate":"2025-12-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145657226","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01DOI: 10.1016/j.eneco.2025.109077
Arjan Trinks , Erik Hille
A central concern in climate policy making is that increasing carbon costs unilaterally would harm economic activity and competitiveness. This paper empirically evaluates this concern by providing first international firm-level evidence on the joint performance effects of climate policies. Shadow prices of fossil energy sources serve as an integral and internationally comparable measure of carbon costs. This measure captures both explicit and implicit carbon costs arising from diverse policy mixes and interactions, providing new insights into climate policy effects. We assess the impact of carbon costs using fixed effects instrumental variable estimation on up to 3.1 million firms from 32 countries and 15 competitiveness-prone industrial sectors from 2000 to 2019. Carbon costs hardly hurt most industrial firms and seemed to have predominantly triggered adaptation rather than relocation responses. Economically modest employment reductions were concentrated in capital-intensive firms and small firms in emissions-intensive, trade-exposed sectors, particularly in the EU. In these sectors, large and capital-intensive firms ramped up domestic investments in response to carbon cost increases, and small firms improved productivity. Profitability and exit probabilities were hardly affected throughout all subgroups of firms.
{"title":"Carbon costs and industrial firm performance: Evidence from international microdata","authors":"Arjan Trinks , Erik Hille","doi":"10.1016/j.eneco.2025.109077","DOIUrl":"10.1016/j.eneco.2025.109077","url":null,"abstract":"<div><div>A central concern in climate policy making is that increasing carbon costs unilaterally would harm economic activity and competitiveness. This paper empirically evaluates this concern by providing first international firm-level evidence on the joint performance effects of climate policies. Shadow prices of fossil energy sources serve as an integral and internationally comparable measure of carbon costs. This measure captures both explicit and implicit carbon costs arising from diverse policy mixes and interactions, providing new insights into climate policy effects. We assess the impact of carbon costs using fixed effects instrumental variable estimation on up to 3.1 million firms from 32 countries and 15 competitiveness-prone industrial sectors from 2000 to 2019. Carbon costs hardly hurt most industrial firms and seemed to have predominantly triggered adaptation rather than relocation responses. Economically modest employment reductions were concentrated in capital-intensive firms and small firms in emissions-intensive, trade-exposed sectors, particularly in the EU. In these sectors, large and capital-intensive firms ramped up domestic investments in response to carbon cost increases, and small firms improved productivity. Profitability and exit probabilities were hardly affected throughout all subgroups of firms.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109077"},"PeriodicalIF":14.2,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145651556","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01DOI: 10.1016/j.eneco.2025.109079
Min-kyeong (Min) Cha , Daniel Matisoff
How does electricity consumption behavior change with different energy sources? We seek to understand how consumers change their consumption behaviors when they begin to use renewable electricity via a community solar program.
Previous research has found that consumers distinguish the power sources of electricity and even change their consumption behavior. Recent studies have explored changes in consumption associated with utility-run green electricity programs and rooftop solar, finding mixed results; however, studies on community solar programs are lacking. This study explores household-level consumption behavior after adopting solar electricity without panel installation.
We use household-level monthly electricity consumption data from a large electric co-op in Georgia, U.S., ranging from 2015 to 2023, for both community solar subscribers and non-subscribers. We use staggered difference-in-differences, along with matching, to compare consumption changes before and after the subscription. Findings reveal that the consumption does not change after subscription, but subscribers' monthly bills increase by about 3–4 %, indicating they pay more to make the grid greener.
This study will broaden the understanding of electricity sources and consumer behavior by adding the analysis of prevalent but under-studied community solar electricity programs in the U.S. Southeast context. It will help utility planners understand the changing demand as a result of renewable energy adoption.
{"title":"Solar electricity without solar panels: Changes in consumption behavior due to community solar programs","authors":"Min-kyeong (Min) Cha , Daniel Matisoff","doi":"10.1016/j.eneco.2025.109079","DOIUrl":"10.1016/j.eneco.2025.109079","url":null,"abstract":"<div><div>How does electricity consumption behavior change with different energy sources? We seek to understand how consumers change their consumption behaviors when they begin to use renewable electricity via a community solar program.</div><div>Previous research has found that consumers distinguish the power sources of electricity and even change their consumption behavior. Recent studies have explored changes in consumption associated with utility-run green electricity programs and rooftop solar, finding mixed results; however, studies on community solar programs are lacking. This study explores household-level consumption behavior after adopting solar electricity without panel installation.</div><div>We use household-level monthly electricity consumption data from a large electric co-op in Georgia, U.S., ranging from 2015 to 2023, for both community solar subscribers and non-subscribers. We use staggered difference-in-differences, along with matching, to compare consumption changes before and after the subscription. Findings reveal that the consumption does not change after subscription, but subscribers' monthly bills increase by about 3–4 %, indicating they pay more to make the grid greener.</div><div>This study will broaden the understanding of electricity sources and consumer behavior by adding the analysis of prevalent but under-studied community solar electricity programs in the U.S. Southeast context. It will help utility planners understand the changing demand as a result of renewable energy adoption.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109079"},"PeriodicalIF":14.2,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145657227","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Promotion of a fair and low-carbon transition is key to sustainable development. Energy quota trading policies (EQTP) are a crucial experiment in China's energy market reform, but their ability to provide a “dual dividend” of environmental control and income distribution improvement needs additional study. Using 2007–2022 city-level statistics and micro-level data from Chinese listed businesses, this analysis treats the EQTP as a quasi-natural experiment. A staggered DID model is used to evaluate the EQTP's influence on company and regional labor income share (LS). On average, the EQTP boosts firm-level LS by 2.34 %. Mechanism analysis shows that the “substitution effect” and “output effect” drive this growth. However, city-level study shows that the EQTP has no statistically significant influence on regional LS. To tackle this “micro-macro paradox,” the study breaks down LS alterations. The decomposition results demonstrate that the substitution impact inside businesses increases LS most, but negative inter-firm resource allocation and firm exit effects in the aggregation process somewhat counteract this positive effect. Heterogeneity study shows that the EQTP has a greater distributional improvement effect in non-resource-based cities, non-former industrial bases, heavy-pollution industries, and high-tech sectors. This study offers policy ideas for carbon neutrality and factor allocation optimization.
{"title":"Income distribution effect of energy marketization reform: Evidence from Chinese enterprises and regions","authors":"Wei Dou , Shengling Zhang , Zihao Wu , Ruibing Ji , Yu Hao","doi":"10.1016/j.eneco.2025.109073","DOIUrl":"10.1016/j.eneco.2025.109073","url":null,"abstract":"<div><div>Promotion of a fair and low-carbon transition is key to sustainable development. Energy quota trading policies (EQTP) are a crucial experiment in China's energy market reform, but their ability to provide a “dual dividend” of environmental control and income distribution improvement needs additional study. Using 2007–2022 city-level statistics and micro-level data from Chinese listed businesses, this analysis treats the EQTP as a quasi-natural experiment. A staggered DID model is used to evaluate the EQTP's influence on company and regional labor income share (LS). On average, the EQTP boosts firm-level LS by 2.34 %. Mechanism analysis shows that the “substitution effect” and “output effect” drive this growth. However, city-level study shows that the EQTP has no statistically significant influence on regional LS. To tackle this “micro-macro paradox,” the study breaks down LS alterations. The decomposition results demonstrate that the substitution impact inside businesses increases LS most, but negative inter-firm resource allocation and firm exit effects in the aggregation process somewhat counteract this positive effect. Heterogeneity study shows that the EQTP has a greater distributional improvement effect in non-resource-based cities, non-former industrial bases, heavy-pollution industries, and high-tech sectors. This study offers policy ideas for carbon neutrality and factor allocation optimization.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109073"},"PeriodicalIF":14.2,"publicationDate":"2025-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145691077","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-29DOI: 10.1016/j.eneco.2025.109076
Kyungsik Nam , Won-Ki Seo
We estimate the temperature sensitivity of residential electricity demand during extreme temperature events using the distribution-to-scalar regression model. Rather than relying on simple averages or individual quantile statistics of raw temperature data, we construct distributional summaries — such as probability density, hazard rate, and quantile functions — to retain a more comprehensive representation of temperature variation. This approach not only utilizes richer information from the underlying temperature distribution but also enables the examination of extreme temperature effects that conventional models fail to capture. Additionally, recognizing that distribution functions are typically estimated from limited discrete observations and may be subject to measurement errors, our econometric framework explicitly addresses this issue. Empirical findings from the hazard-to-demand model indicate that residential electricity demand exhibits a stronger nonlinear response to cold waves than to heat waves, while heat wave shocks demonstrate a more pronounced incremental effect. Moreover, the temperature quantile-to-demand model produces largely insignificant demand response estimates, attributed to the offsetting influence of two counteracting forces.
{"title":"Nonlinear temperature sensitivity of residential electricity demand: Evidence from a distributional regression approach","authors":"Kyungsik Nam , Won-Ki Seo","doi":"10.1016/j.eneco.2025.109076","DOIUrl":"10.1016/j.eneco.2025.109076","url":null,"abstract":"<div><div>We estimate the temperature sensitivity of residential electricity demand during extreme temperature events using the distribution-to-scalar regression model. Rather than relying on simple averages or individual quantile statistics of raw temperature data, we construct distributional summaries — such as probability density, hazard rate, and quantile functions — to retain a more comprehensive representation of temperature variation. This approach not only utilizes richer information from the underlying temperature distribution but also enables the examination of extreme temperature effects that conventional models fail to capture. Additionally, recognizing that distribution functions are typically estimated from limited discrete observations and may be subject to measurement errors, our econometric framework explicitly addresses this issue. Empirical findings from the hazard-to-demand model indicate that residential electricity demand exhibits a stronger nonlinear response to cold waves than to heat waves, while heat wave shocks demonstrate a more pronounced incremental effect. Moreover, the temperature quantile-to-demand model produces largely insignificant demand response estimates, attributed to the offsetting influence of two counteracting forces.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109076"},"PeriodicalIF":14.2,"publicationDate":"2025-11-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145613625","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-29DOI: 10.1016/j.eneco.2025.109072
Jiangyuan Li , Tao Ding , Ruipeng Tan , Liang Liang
Emissions Trading Scheme (ETS) has been widely implemented as a key measure to address climate challenges, yet its efficiency in reducing carbon emissions (CEs) still faces numerous challenges. To promote the development of the global carbon market and enhance CEs reduction efficiency, this study examines the impact of the trading characteristics of China's ETS on its CEs reduction efficiency using sample data from Chinese prefecture-level cities between 2007 and 2019. The baseline regression results indicate that the carbon reduction effect of ETS is associated with trading scale: each million tons of carbon trading volume (CTV) reduces CEs by an average of 1.69 million tons, and each million yuan of carbon trading turnover (CTT) reduces CEs by an average of 0.103 million tons. These findings remain robust across various tests. Mechanism analysis reveals that the ETS drives corporate CEs reduction by increasing liquidity pressure on enterprises and raising their awareness of emission reduction. Further analysis of trading characteristics shows that increased volatility or illiquidity in carbon trading diminishes the carbon reduction effect per unit of CTV and CTT. Additionally, this study identifies a non-trading carbon reduction effect of ETS, with the deterrence effect being a significant source. Further analysis reveals that the CEs reduction effect of CTV and CTT steadily rises over time, with a spillover effect and a hysteresis effect lasting one year. Finally, based on the findings, this study proposes several recommendations to enhance the CEs reduction efficiency of ETS.
{"title":"Trading characteristics of emissions trading scheme and carbon emission reduction efficiency: Evidence from China","authors":"Jiangyuan Li , Tao Ding , Ruipeng Tan , Liang Liang","doi":"10.1016/j.eneco.2025.109072","DOIUrl":"10.1016/j.eneco.2025.109072","url":null,"abstract":"<div><div>Emissions Trading Scheme (ETS) has been widely implemented as a key measure to address climate challenges, yet its efficiency in reducing carbon emissions (CEs) still faces numerous challenges. To promote the development of the global carbon market and enhance CEs reduction efficiency, this study examines the impact of the trading characteristics of China's ETS on its CEs reduction efficiency using sample data from Chinese prefecture-level cities between 2007 and 2019. The baseline regression results indicate that the carbon reduction effect of ETS is associated with trading scale: each million tons of carbon trading volume (CTV) reduces CEs by an average of 1.69 million tons, and each million yuan of carbon trading turnover (CTT) reduces CEs by an average of 0.103 million tons. These findings remain robust across various tests. Mechanism analysis reveals that the ETS drives corporate CEs reduction by increasing liquidity pressure on enterprises and raising their awareness of emission reduction. Further analysis of trading characteristics shows that increased volatility or illiquidity in carbon trading diminishes the carbon reduction effect per unit of CTV and CTT. Additionally, this study identifies a non-trading carbon reduction effect of ETS, with the deterrence effect being a significant source. Further analysis reveals that the CEs reduction effect of CTV and CTT steadily rises over time, with a spillover effect and a hysteresis effect lasting one year. Finally, based on the findings, this study proposes several recommendations to enhance the CEs reduction efficiency of ETS.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109072"},"PeriodicalIF":14.2,"publicationDate":"2025-11-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145691078","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
扫码关注我们
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号