Carbon neutrality endeavors: the impact of carbon emission trading policies on total factor carbon emission efficiency.

Deepening the carbon market allocation reform is a strong support for carbon peaking and carbon neutrality. China has been piloting carbon trading in batches since 2013. However, there is little literature on whether and how carbon emission trading (CET) improves total factor carbon emission efficiency (TFCEE). To fill this gap, this study first calculates urban TFCEE using an extended Epsilon-based model and then designs a quasi-natural experiment based on causal inference. The staggered DID model is adopted to investigate the impact of CET pilot policies on urban TFCEE and its impact mechanism. Our results show that (1) the CET policy has a significant promoting effect on TFCEE in pilot cities, and this conclusion is reconfirmed by adopting robustness tests. (2) The mediating effect models are employed to confirm the mediating role of green technology innovation, industrial structure upgrading, and resource allocation efficiency in CET policy promoting regional TFCEE. (3) The heterogeneity test of CET policy depicts a considerable positive impact on TFCEE in cities with abundant resources. Eastern and developed cities are more likely to experience better carbon efficiency promotion through this policy than other cities. This study provides evidence for the important role of CET in promoting the development of a low-carbon economy and carbon neutrality.

Unlocking sustainable growth: exploring the catalytic role of green finance in firms' green total factor productivity.

Promoting the development of green finance (GF) is a critical way to address the environmental and developmental problems in China. While existing studies have examined the macroscopic role of GF, few pay attention to its impact on micro-enterprises. To investigate the effect of GF on micro-enterprises, this study considers green credit as a quasi-natural experiment to investigate the effect on firms' green total factor productivity (GTFP). We use the SBM-Malmquist method to measure firms' GTFP and adopt the double dual machine learning approach to explore its impact and potential mechanisms. The findings indicate that (1) the GF can effectively promote the GTFP at the firm level, which has been reconfirmed by robustness tests. (2) The GF can improve firms' GTFP through three pathways: promoting firms' green innovation, alleviating financing constraints, and strengthening managers' environmental concerns. (3). The heterogeneity analysis verifies that state-owned enterprises and large-size firms are more sensitive to the response of green finance. The results of this study lend support to the establishment of green finance and the formulation of corporate green development strategies.

Tax Policy and Total Factor Carbon Emission Efficiency: Evidence from China's VAT Reform.

China, the world's largest carbon emitter, urgently needs to improve its carbon emissions efficiency. This study analyzes the impact of tax policy on total factor carbon emission efficiency (TFCEE). Using the Value Added Tax (VAT) reform in China as an exogenous shock and undesirable-SBM model to measure the total factor carbon emission efficiency of 282 cities in China from 2003 to 2019, our multiple difference-in-difference (DID) estimates show that VAT reform significantly improves the TFCEE in the city level. These potential mechanisms show that VAT reform has promoted upgrading industrial structures, stimulated technological innovation, improved human capital, introduced FDI through four channels, and enhanced the TFCEE. The heterogeneity study found that VAT reform has a higher effect on promoting TFCEE in coastal and large megacities than in inland and small and medium-sized cities. This study provides a theoretical basis for policy instruments to improve energy efficiency and the environment.