Spatio-Temporal Evolution of High-Quality Development and the Impact of Carbon Emissions Trading Schemes

Abstract

Carbon control has become a key strategy in the high-quality development (HQD) phase of emerging countries, but the spillover effects of implementing carbon control instruments on HQD remain to be verified. In order to explore the realistic level of HQD in China and the mechanism of how carbon controls impact on it, this paper analyzes the regional differences and spatio-temporal dynamics of HQD in China by using Chinese provincial panel data from 2006 to 2019. This study evaluated the implications of a regionally implemented carbon emissions trading scheme (ETS) on HQD by using the difference-in-differences (DID) model. The results show that the overall level of HQD in China’s provinces continues to rise. The level of HQD in most provinces showed a transition from low to high and then stabilization. Over the sample period, the national average HQD index increased from 18.95 to 29.96, a growth rate of 58.1%. There was significant regional heterogeneity in HQD. The highest HQD indices in the eastern, central and western regions were 35.67, 27.52 and 24.78, respectively. The level of HQD in the eastern regions was much higher than in the central and western areas. Further analysis revealed that ETS was able to significantly increase the overall level of HQD. Having found that there is regional heterogeneity in HQD, this research examines the specific effects of ETS on HQD and discovers that ETS supports regional HQD in the eastern and central areas, but has no significant influence on HQD in the western region. The robustness of the results was confirmed by the use of parallel trend tests, lagged effects, the removal of environmental disturbances and the replacement of evaluation variables or models. The above findings can be used as a reference for formulating low-carbon policy and promoting HQD levels.