The impact of energy consumption permit trading scheme on green development efficiency: firm-level evidence in China

Energy consumption permit trading scheme (ECPTS) is a strategic policy to address tightening energy supply and global warming. This paper employs a Malmquist–Luenberger index based on the slack-based measure to calculate firms’ green development efficiency (GDE) from 2013 to 2021, and applies a difference-in-differences model to examine the impact of the ECPTS on firms’ green development efficiency. The findings demonstrate that the ECPTS can enhance firms’ and urban green development efficiency, and such effect is more pronounced in non-political connection enterprises, competitive industries, and regions with stricter environmental regulation intensity. Furthermore, compared with other energy rights trading pilot areas, the Zhejiang energy rights trading market is more prominent in improving firm’s GDE. Channel tests show that the ECPTS increases firms’ green development efficiency by improving energy efficiency and encouraging green innovation, especially the source control green innovation. At the city level, ECPTS also improves regional GDE through urban technological innovation and urban energy efficiency. These results provide valuable policy implications for ECPTS to promote high-quality green development.

Research framework of the impact of energy consumption permit trading scheme on green development efficiency