The heterogeneous effects of emissions trading systems on energy consumption

Shum, WY; Tan, X; Nghiem, X-H; Cheong, TS; Ma, N

The heterogeneous effects of emissions trading systems on energy consumption

Shum, WY Tan, X Nghiem, X-H Cheong, TS Ma, N

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Publisher:: Elsevier
Publication Type:: Journal Article
Citation:: Energy Strategy Reviews, 2025, 62, pp. 101935
Issue Date:: 2025-11

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Field	Value	Language
dc.contributor.author	Shum, WY
dc.contributor.author	Tan, X
dc.contributor.author	Nghiem, X-H
dc.contributor.author	Cheong, TS
dc.contributor.author	Ma, N
dc.date.accessioned	2026-05-13T05:04:05Z
dc.date.available	2026-05-13T05:04:05Z
dc.date.issued	2025-11
dc.identifier.citation	Energy Strategy Reviews, 2025, 62, pp. 101935
dc.identifier.issn	2211-467X
dc.identifier.uri	http://hdl.handle.net/10453/194965
dc.description.abstract	Various measures have been proposed to reduce energy consumption (and ultimately emission) among which emission trading scheme (ETS) has been on top of the agenda. However, the majority of the existing literature focuses on the general impact of ETS while ignoring its potential heterogeneous effects. This paper investigates the influence of ETS on energy consumption with respect to different groups of stakeholders in China s Hubei province. To overcome the shortcomings of traditional econometric methods, the distribution dynamics method (which can capture transition probabilities and future evolutions) is employed. Empirical results confirm the significant and inhibiting impact of ETS on energy consumption in Hubei province, China. The superior role of benchmark and historical allocation methods in mitigating energy consumption is also confirmed. As the ETS can lower energy consumption in different areas (urban and rural), different types of firms (State-owned and private) and different industries (high- and low-polluting ones), Hubei provincial leaders are recommended to utilize this kind of scheme to decouple economic growth and energy consumption, thus protecting the environment in this area. Furthermore, other provinces in China may take the Hubei ETS as a shining example and implement appropriate steps similar to those of the Hubei ETS to yield similar benefits.
dc.language	en
dc.publisher	Elsevier
dc.relation.ispartof	Energy Strategy Reviews
dc.relation.isbasedon	10.1016/j.esr.2025.101935
dc.rights	info:eu-repo/semantics/openAccess
dc.subject	1402 Applied Economics, 1605 Policy and Administration
dc.title	The heterogeneous effects of emissions trading systems on energy consumption
dc.type	Journal Article
utslib.citation.volume	62
utslib.for	1402 Applied Economics
utslib.for	1605 Policy and Administration
pubs.organisational-group	University of Technology Sydney
pubs.organisational-group	University of Technology Sydney/DVC (International)
pubs.organisational-group	University of Technology Sydney/DVC (International)/Australia-China Relations Institute
utslib.copyright.status	open_access	*
pubs.consider-herdc	true
dc.rights.license	This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0). To view a copy of this license, visit https://creativecommons.org/licenses/by/4.0/
dc.date.updated	2026-05-13T05:04:03Z
pubs.publication-status	Published
pubs.volume	62

Abstract:

Various measures have been proposed to reduce energy consumption (and ultimately emission) among which emission trading scheme (ETS) has been on top of the agenda. However, the majority of the existing literature focuses on the general impact of ETS while ignoring its potential heterogeneous effects. This paper investigates the influence of ETS on energy consumption with respect to different groups of stakeholders in China s Hubei province. To overcome the shortcomings of traditional econometric methods, the distribution dynamics method (which can capture transition probabilities and future evolutions) is employed. Empirical results confirm the significant and inhibiting impact of ETS on energy consumption in Hubei province, China. The superior role of benchmark and historical allocation methods in mitigating energy consumption is also confirmed. As the ETS can lower energy consumption in different areas (urban and rural), different types of firms (State-owned and private) and different industries (high- and low-polluting ones), Hubei provincial leaders are recommended to utilize this kind of scheme to decouple economic growth and energy consumption, thus protecting the environment in this area. Furthermore, other provinces in China may take the Hubei ETS as a shining example and implement appropriate steps similar to those of the Hubei ETS to yield similar benefits.

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http://hdl.handle.net/10453/194965