China’s carbon emission trading and income inequality: evidence from factor substitution
Shixiong He, Lei Jiang, Mengxu Li, Jianghua Liu · 2026
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Description
Shixiong He and three co-authors study how China's carbon trading policy affected income inequality, in a 2026 paper. Carbon pricing is spreading worldwide, and its fairness effects matter. The team joins economic theory with city-level data. Treating emission permits as a production input drives the theory. When permit prices are low, firms swap permits for labor.
That swap raises labor's share of income, the model shows. Data tests confirm the channel: inequality fell where trading applied. The equalizing effect passed robustness checks. It ran stronger in cities with high starting inequality. More market-oriented cities also gained more. Government green spending and easy job mobility amplified the effect. The authors draw lessons for fair climate policy design. Cutting emissions and narrowing income gaps can advance together, they argue.
Catalog record
| CREATOR | Shixiong He, Lei Jiang, Mengxu Li, Jianghua Liu |
|---|---|
| YEAR | 2026 |
| COLLECTION | PAPERS |
| FORMAT | TXT |
| FILE SIZE | 53 KB |
| VERSION | 1.0 |
| LICENSE | CC BY 4.0 |
| RIGHTS | CC BY |
| SOURCE | Europe PMC |