Natural Hazards

, Volume 95, Issue 1–2, pp 91–111 | Cite as

Does carbon emissions trading affect the financial performance of high energy-consuming firms in China?

  • Yue-Jun ZhangEmail author
  • Jing-Yue Liu
Original Paper


Whether China’s carbon emissions trading (CET) has an impact on the financial performance of the market players of carbon trading, i.e., firms, is crucial to the sustainable development of national economy and carbon trading market. Based on the panel data of the listed firms in the seven high energy-consuming industries in China during 2010–2017, this paper uses the DID model to study the impact of CET on the firms’ financial performance. The empirical results show that the impact of CET on firms’ financial performance presents obvious industrial heterogeneity; CET policy reduces the financial performance of firms in the nonferrous metal industry but improves that in the power industry. In addition, with the implementation of CET policy, its impact on the financial performance of firms in the nonferrous metal and power industries is increasingly intensifying. Finally, there is a lag of 2–4 years on the impact of CET on the firms’ financial performance in the chemical, paper and aviation industries, and the effects change from negative to positive over time. That is, CET policy can hardly ensure that all firms are profitable in the short term, but there is still the possibility of profitability in the long term.


Carbon emissions trading Financial performance Difference-in-differences model China 



We are grateful to the financial support from the National Natural Science Foundation of China (Nos. 71273028, 71322103, 71774051), National Program for Support of Top-notch Young Professionals (No. W02070325), Changjiang Scholars Program of the Ministry of Education of China (No. Q2016154) and Hunan Youth Talent Program.


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Copyright information

© Springer Nature B.V. 2018

Authors and Affiliations

  1. 1.Business SchoolHunan UniversityChangshaChina
  2. 2.Center for Resource and Environmental ManagementHunan UniversityChangshaChina

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