Evaluation of China's carbon emission trading policy from corporate innovation

Using trading data of China's seven pilot carbon emission trading markets from 2013 to 2016, we assess the effectiveness of the carbon emission trading policy from the perspective of corporate innovation. Robust results suggest both a high carbon trading price and high price volatility enhance corporate innovation, which confirms the effectiveness of carbon emission trading policy in promoting corporate carbon-reduction innovation. Our research supports the expansion of China's carbon emission trading from regional pilot projects to the national market and guides policymakers to make timely policy adjustments based on the evaluation of carbon emissions trading policy.

Automated summary

The study indicates that both high carbon trading prices and price volatility can promote corporate innovation, leading to emissions reduction. Therefore, the carbon emission trading policy is effective in promoting corporate carbon-reduction innovation, supporting the expansion of carbon emission trading to the national market.