Creation or Destruction:Carbon Emissions Trading and Firms'Employment Dynamics
As a key policy tool for achieving China's Carbon Peaking and Carbon Neutrality Goals,carbon emission trading,while promoting energy conservation,emissions reduction,and low carbon development,has also impacted the established economic and social development patterns.Under the double pressures of advancing energy conservation and emissions reduction and ensuring employment stability,examining how carbon emission trading affects firms'employment dynamics is critical to improving the national carbon market system and achieving a balance between environmental protection and job creation.Using a quasi-natural experiment of China's carbon emission trading pilot and a Propensity Score Matching-Difference-in-Differences(PSM-DID)model,this study examines the effect of carbon emission trading on enterprise employment dynamics and how.It finds that carbon emission trading simultaneously increases both employment creation and destruction rates,leading to net employment growth through the combined effects.Mechanism analysis demonstrates that the scale effect and the low-carbon technological innovation are the primary channels driving these changes,while inter-factor substitution or complementarity has little influence.Heterogeneity analysis finds that the net employment growth benefits are more pronounced for technical and managerial personnel,state-owned enterprises,and firms with high mobility in the carbon market.Additionally,the research shows that carbon trading leads to job destruction in low-productivity firms while promoting job creation and net employment growth in high-productivity firms.The study has the following policy recommendations.First,efforts should be accelerated to establish a unified,standardized,and efficient national carbon market while leveraging the carbon trading mechanism to achieve the Carbon Peaking and Carbon Neutrality Goals and promote high-quality economic and social development.Secondly,it is necessary to strengthen the research and application of low-carbon technologies,promote the green and low-carbon transformation and upgrading of traditional industries,and stimulate the potential of green industries to drive employment.Thirdly,the relevant departments should take into account the different realities and development needs of enterprises and their specific characteristics,and set reasonable and flexible carbon quota targets accordingly.
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