How the digital economy is empowering green strategies for breaking carbon lock-in.

In the era of climate change and carbon neutrality, China is actively coping with its carbon lock-in dilemma. In this context, the development of the digital economy is considered a possible path to carbon unlocking. This study contributes to the literature by providing a comprehensive analysis of how the digital economy can be leveraged to address carbon lock-in, highlighting the importance of formal environmental regulation and informal environmental regulation in enhancing this effect. Accordingly, following findings are highlighted. (1) Our primary findings provide strong evidence on the negative effect of the digital economy on carbon lock-in; by implication, improving the digital economy is an efficient measure for eradicating carbon lock-in. (2) The digital economy shows the greatest marginal impact on industrial lock-in, while its inhibiting effect on behavior lock-in is the least pronounced. Moreover, the digital economy plays a prominent role in curbing carbon lock-in in provinces with a higher level of physical, human, and social capital. And the asymmetric impacts of the digital economy on carbon lock-in are significant at most quantiles. (3) Environmental regulation is a significant moderator. Put differently, the synergy of formal environmental regulation and the digital economy, as well as informal environmental regulation and the digital economy, are important means to break carbon lock-in. (4) The carbon lock-in mitigation effect of the digital economy is caused mainly by increasing technical market turnover and the efficiency of energy consumption.

Can carbon emission trading policy break China's urban carbon lock-in?

Greenhouse gas emissions from the use of fossil energy are the main drivers of global warming. China's dominant consumption of fossil energy necessitates adjustments in its energy consumption structure to break free from the carbon lock-in (CLI) phenomenon. Market-based environmental regulations, represented by the carbon trading market (CTM), play an important role in achieving the dual carbon goals of China. Using panel data of 270 prefecture-level cities in China from 2005 to 2020, this study applies a difference-in-difference model to identify the effect of CTM on urban CLI, analyze its transmission mechanism, and further examine the impact of urban characteristic heterogeneity on policy effects from multiple perspectives. Results show that the construction of CTM significantly reduces the degree of CLI of pilot cities; (2) CTM mainly affects urban CLI by promoting urban green technology innovation, industrial structure upgrading, and public green behavior; and (3) the inhibitory effect of CTM on CLI is more significant in cities with high carbon price, industrialization, and digital finance levels. The primary paths toward realizing carbon unlocking include optimizing the institutional design for CTM, enhancing the effective promotion and application of low-carbon technologies, cultivating the green awareness of the public, and increasing government investments in energy-saving and emission reduction techniques.

Impact assessment of climate policy on Poland's power sector.

This article addresses the impact of the European Union Emissions Trading System (EU ETS) on Poland's conventional energy sector in 2008-2020 and further till 2050. Poland is a country with over 80% dependence on coal in the power sector being under political pressure of the European Union's (EU) ambitious climate policy. The impact of the increase of the European Emission Allowance (EUA) price on fossil fuel power sector has been modelled for different scenarios. The innovation of this article consists in proposing a methodology of estimation actual costs and benefits of power stations in a country with a heavily coal-dependent power sector in the process of transition to a low-carbon economy. Strong political and economic interdependence of coal and power sector has been demonstrated as well as the impact caused by the EU ETS participation in different technology groups of power plants. It has been shown that gas-fuelled combined heat and power units are less vulnerable to the EU ETS-related costs, whereas the hard coal-fired plants may lose their profitability soon after 2020. Lignite power plants, despite their high emissivity, may longer remain in operation owing to low operational costs. Additionally, the results of long-term, up to 2050, modelling of Poland's energy sector supported an unavoidable need of deep decarbonisation of the power sector to meet the post-Paris climate objectives. It has been concluded that investing in coal-based power capacity may lead to a carbon lock-in of the power sector. Finally, the overall costs of such a transformation have been discussed and confronted with the financial support offered by the EU. The whole consideration has been made in a wide context of changes ongoing globally in energy markets and compared with some other countries seeking transformation paths from coal. Poland's case can serve as a lesson for all countries trying to reduce coal dependence in power generation. Reforms in the energy sector shall from the very beginning be an essential part of a sustainable transition of the whole nation's economy. They must scale the power capacity to the future demand avoiding stranded costs. The reforms must be wide-ranging, based on a wide political consensus and not biased against the coal sector. Future energy mix and corresponding technologies shall be carefully designed, matched and should remain stable in the long-term perspective. Coal-based power capacity being near the end of its lifetime provides an economically viable option to commence a fuel switch and the following technology replacement. Real benefits and costs of the energy transition shall be fairly allocated to all stakeholders and communicated to the society. The social costs and implications in coal-dependent regions may be high, especially in the short-term perspective, but then the transformation will bring profits to the whole society.

Can industrial structure optimization and industrial structure transition both lead to carbon lock-in mitigation? The case of China.

The optimization and transition of the industrial structure help improve the quality of the economy, moving it toward low-carbon development. By using the Instrumental Variable Generalized Method of Moments model and a city-level dataset covering the period 2006-2019, this paper explores the carbon lock-in mitigation effects of industrial structure optimization and industrial structure transition, respectively. The heterogeneity and the synthetic industrial structure adjustment effect are detected, and the potential impact mechanism is also explored. Some findings have been generated. (1) Both industrial structure optimization and industrial structure transition realize carbon lock-in eradication. (2) Industrial structure optimization and transition are more effective in inhibiting carbon lock-in in cities with a higher level of economic background. (3) By generating an interaction term of industrial structure optimization and transition and examining the impact of the interaction term on carbon lock-in, this paper detects that industrial structure optimization and transition have a synthetic impact on carbon lock-in, showing a "1 + 1 > 2" effect. (4) Industrial structure optimization and transition both affect carbon lock-in by improving technological innovation level, which is the impact mechanism. Some policy implications, such as sectoral diversification and promoting research and development, are put forward for better industrial structure development and carbon unlocking.

Impact of carbon lock-in on green economic efficiency: Evidence from Chinese provincial data.

Carbon lock-in is a major obstacle to transforming carbon-based energy systems toward carbon peaking and neutralization, affecting the green economy. However, its impacts and paths on green development are unclear, and it is difficult to represent carbon lock-in using a single indicator. This study measures five types of carbon lock-ins and their comprehensive effect using the entropy index of 22 indirect indicators in 31 Chinese provinces during 1995-2021. Moreover, green economic efficiencies are measured using a fuzzy slacks-based model considering undesirable outputs. The panel Tobit models are used to test the impacts of carbon lock-ins on green economic efficiencies and their decompositions. Our results show that provincial carbon lock-ins in China range from 0.20 to 0.80, with notable type and regional differences. Overall carbon lock-in levels are similar, but the severity of different carbon lock-in types varies, with social behavior being the most serious. However, the overall trend of carbon lock-ins is declining. Low pure green economic efficiencies, rather than scale efficiencies, contribute to China's worrisome green economic efficiencies, but they are decreasing and accompanied by regional gaps. Carbon lock-in hinders green development, but a specific analysis is needed for different carbon lock-in types and development phases. It is biased to assume that all carbon lock-ins hinder sustainable development, as some are even necessary. The impacts of carbon lock-in on green economic efficiency depend more on its effect on technology than on scale change. Implementing various measures to unlock carbon and maintaining reasonable levels of carbon lock-in can promote high-quality development. This paper may promote the development of new unlocking CLI measures and sustainable development policies.

Analysis of the Cause of Household Carbon Lock-In for Chinese Urban Households.

Household energy conservation is an important contributor to achieve the carbon emission reduction target. However, the actual energy-saving effect of Chinese households is under expectation. One reason for this is because household energy consumption is locked in at a certain level, which has become an obstacle to household carbon emission reduction. In order to reduce this obstacle, this study explored the cause of household carbon lock-in based on grounded theory, targeting newly furnished households. A theoretical model was developed to reveal the formation mechanism of carbon lock-in effect in the purchasing process of household energy-using appliances. NVivo 12 software was used to analyze the decoration diaries of 616 sample households, and the results showed that (1) the direct antecedent of the household carbon lock-in effect was the lock-in of purchasing behavior, and the household carbon lock-in effect was mainly exhibited in the consumption path dependence (of energy-using appliances) and the solidification of energy structure; (2) the willingness to purchase household appliances was the direct antecedent of purchasing behavioral lock-in, and the cost had a moderating effect on the transformation from purchase willingness to behavioral lock-in; and (3) in the process of purchasing household appliances, reference groups, value perception, and ecological awareness can promote purchasing behavioral lock-in by affecting willingness of purchase. Suggestions to promote unlocking of household carbon were also proposed.