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Chen Xiang, Assistant Professor, School of International and Public Affairs, Shanghai Jiao Tong University, will speak as part of the Harvard-China Research Seminar Series.
Chen Xiang, Assistant Professor, School of International and Public Affairs, Shanghai Jiao Tong University, will speak as part of the Harvard-China Research Seminar Series.
China’s approach to environmental regulation relies heavily on campaign-style enforcement and blunt-force regulation. While considered effective in the short run, this approach is often inefficient and generates unintended regulatory outcomes in the longer run. At the same time, China continues to experiment with the use of market-based approaches that are theoretically more efficient and have the potential to facilitate sustained reductions in carbon emissions. Arguably the most high-profile example is the Guangdong Emissions Trading Scheme (ETS), which was launched in 2013 as a national pilot scheme. We construct a synthetic control of Guangdong and analyze 51,076 party-led newspaper reports to show that while the ETS reduced emissions in the short run, these reductions were systematically associated with political signaling. Our findings suggest that current market-based approaches in China may not be qualitatively different to more direct forms of environmental regulation.