Beschreibung:
A carbon emission trading system (ETS) is a carbon finance system based on carbon allowances and emission reductions to address climate risks. This study investigates the effects of China’s pilot ETSs on firm productivity using a quasi-natural experiment. The results show that the ETS effectively addresses the challenges of climate change but has a significant negative effect on productivity. Theoretical and empirical mechanism tests indicate that the ETS affects productivity by crowding out technological innovation, productive capital, and productive labor, leading to a decline in technology productivity, labor productivity, and capital productivity. Moreover, this study finds that the effects of the ETS on productivity depend on the ownership type and the institutional environment. No statistically significant effects of the ETS on productivity occur in state-owned firms, but significant negative effects are observed in private firms and foreign-owned firms, with larger effects in the former than the latter. The magnitude of the significant negative effects is twice as large for firms with poor institutional environments than for those with good institutional environments