Conference Agenda

China's Carbon Emission Trading Scheme (ETS) has completed its first decade, marking a significant transition from regional ETS pilots to a nationwide market, albeit limited to the power sector. Several fundamental questions remain unanswered: Whether and how does carbon ETS facilitate firms’ competitiveness? How can the allowance allocation rules in the nationwide market be improved to enable carbon market participation? How can we design the nationwide market to address the incomplete information on abatement costs and local externalities of abatement? Three papers presented in this thematic session comprehensively evaluate China's carbon market through empirical evidence, lab-in-the-field experiments, and theoretical modeling and simulation. Leveraging regional pilots as a quasi-natural experiment, paper one examines the causal impacts of ETS on firms’ innovation and competitiveness. This paper unravels a critical yet unexplored channel of how early climate innovators can gain a competitive advantage. Paper two explores how alternative allowance allocation rules could facilitate carbon market participation. This paper implements a lab-in-the-field experiment for three thousand industry practitioners through the Beijing Green Exchange training courses. On top of the policy design, the last paper discusses the trade-off in policy design between market and planning under incomplete information for carbon abatement costs and the local externality of abatement.

This session focuses on how individual preferences and attitudes form or change depending on whether collective action is taken and how successful it is. Bartels & Kesternich analyse a potential crowding out of voluntary action in presence of collective action. Carlsson et al. look at support for climate leadership, and the role of conditionality. Pahle et al. analyse the change of preferred political level (national, regional, international) of action in light of (being informed about) the increasingly likeliness that the Paris climate goals will be failed. Overall results suggest a “weak unidirectional link” in the sense that actual collective action has very little effect of individual preferences, but to some degree affects preferences for desired collective action.

The session investigates how nudges and taxes interact in reducing externalities. It encompasses three papers that complement each other in terms of methods and results. The first one, presented by Olof Johansson Stenman, analyzes theoretically pro-social nudges and their interaction with the Pigouvian tax. The second one, presented by Stefan Ambec, report results from an online shopping experiment with a nudge (a traffic-light label) and two levels of a carbon tax. The third one, presented by Gregory Sun, estimates the welfare impact of nudges and taxes with data on 300 experiments on cigarettes, vaccinations, and energy conservation.