Mandate-based and Market-based Policies:Comparative Analyses on Carbon Mitigation Effectiveness of China's Climate Policies
Mandate-based and market-based policies are two ways to achieve policy goals,and there is no consensus on which is better.Taking China's climate policies for example,this paper compares the carbon mitigation effectiveness and mechanisms of the low-carbon provinces and cities pilot(LCPC),a mandate-based policy,and the emission trading system pilot(ETS),a market-based policy,using event study analyses.Through mechanism tests,we find that LCPC achieved carbon reduction effects by curbing output,but the emission intensity did not decrease.On the other hand,ETS resulted in a reduction in carbon emission intensity and an expansion of economic output,though the total carbon emissions increased.The heterogeneity analyses show that the main driving force for reducing carbon emissions in LCPC is from regions with relatively worse economic status,and the effect on increasing carbon emissions of ETS is most obvious in areas with low carbon emission intensity.In the context of China's goal of carbon peaking and carbon neutrality,this paper provides a beneficial reference for future climate policy design.
low-carbon province and city pilotemission trading system pilotmandate-based policymarket-based policy