Towards sustainable development: The role of the carbon emission trading scheme in improving energy enterprises' carbon performance.

Abstract

Carbon emission trading scheme (CET) has become a vital environmental regulation driving sustainable development within enterprises. Simultaneously, given the substantial contribution of carbon emissions from Chinese energy industry to the overall carbon footprint, it is imperative for energy enterprises to improve carbon performance. Thus, using data from listed Chinese energy enterprises between 2009 and 2020, this paper examines the impact and mechanisms of CET on carbon performance through a difference-in-difference empirical test. The results reveal that CET significantly boosts carbon performance in energy enterprises, a conclusion upheld in robustness tests. It is found that in addition to promoting green innovation and relieving financing constraints, the CET also enhances carbon performance by motivating managerial efficiency and increasing the market value of enterprises. Additionally, the positive effects are more pronounced in regions with higher levels of marketization and in state-owned enterprises. This research confirms the enabling role of CET in micro-level green transformation and sustainable development, offering insights for refining CET practices in China and other developing countries.