Carbon Abatement and Leakage in China's Regional Carbon Emission Trading.

Emission trading schemes (ETS) are increasingly becoming a popular policy instrument to balance carbon abatement and economic growth. As a globally unified carbon pricing system has not yet been established, whether regionally operated ETSs cause carbon leakage remains a major concern. Taking China's regional pilot ETSs as a quasi-natural experiment, the study uses the spatial difference-in-differences method to examine how regional ETSs affect carbon emissions in and outside cities of policy implementation. Our analysis finds that China's regional ETS policy contributes to a 6.1% reduction in urban CO2 emissions and a 6.6% decline in emissions intensity in regulated cities, causing carbon leakages that increase CO2 emissions in neighboring cities by 1.7% on average. Our finding further suggests that regional ETSs mitigate local CO2 emissions through outsourcing production, improving energy efficiency and decarbonizing energy structure, whereas the outsourcing of industrial production drives up CO2 emissions in adjacent cities. Moreover, the performances of regional ETSs vary largely by socioeconomic context and mechanism design. China's regional ETSs reduce CO2 emissions more effectively in central and industrial cities but with more severe carbon leakage, while rigorous compliance mechanisms and active market trading help deepen carbon abatement and alleviate carbon leakage.

Low-carbon energy policies benefit climate change mitigation and air pollutant reduction in megacities: An empirical examination of Shenzhen, China.

The low-carbon transformation of energy system has great significance for megacities to mitigate climate change, which brings co-benefits to improve urban air quality. Taking China's megacity, Shenzhen, as an example, this study examines the potential of wide-ranging energy policies in urban GHG emission reduction and the associated synergistic effect on decreasing major air pollutant emissions. Based on the low emissions analysis platform (LEAP) model, the major results show that an effective implementation of newly emerging energy policies could help cap GHG emissions of Shenzhen in 2025 and nearly halve them by 2035, which would contribute substantially to reducing urban air pollutant emissions. At the sectoral level, the synergistic effect of emission reduction would be the strongest in the transportation sector, followed by the electricity and manufacturing sectors, while it is not significant in the building sector. Moreover, all policies on energy efficiency improvement and demand management that reduce fossil energy consumption show synergistic effects on decreasing air pollutants, while policies on energy structural optimization show differentiated impacts across SO2, NOx, VOCs, and PM2.5. Urban managers should prioritize energy policies with strong synergistic effects and specifically promote the wide application of rooftop PV system and deep electrification of road transportation.