Reducing urban lighting: balancing the needs of biodiversity and urban residents
Peer-Reviewed Publication
Updates every hour. Last Updated: 26-Jun-2025 16:10 ET (26-Jun-2025 20:10 GMT/UTC)
Abstract
Purpose – Although an increasing body of research has examined the role of emission trading systems (ETS) at the macroeconomic level and their various effects at the firm level (Liu et al., 2022; Zhang et al., 2023; Ni et al., 2022; Huang et al., 2024; Ren et al., 2024), there remains a lack of systematic empirical analysis on the specific impact of pilot implementations in different regions on the cost of equity for high-carbon firms, particularly when accounting for varying levels of regional economic development and firm characteristics. Therefore, this study employs a difference-in-differences (DiD) approach to systematically analyze the impact of ETS pilots on the cost of equity for high-carbon firms.
Design/methodology/approach – From late 2013, several regions initiated carbon ETS pilots. ETS’s phased and orderly implementation provides an excellent quasi-natural experiment for formulating a DID model. The pilot regions span China’s eastern, central and western areas, covering various stages of socio-economic development, effectively representing China. To examine the impact of ETS on the cost of equity for high-carbon firms, we use a staggered DiD approach.
Findings – We find that the implementation of ETS significantly increases high-carbon firms’ cost of equity. Investors request more compensation for the increased stock return volatility, reduced operating cash flows and heightened distress risks following ETS. The effect is more pronounced for firms with severe financing constraints, while it is alleviated in state-owned enterprises and firms with higher institutional ownership. Additionally, the effect of ETS is stronger in areas with better governance capacity and economic conditions.
Originality/value – First, this paper complements to some extent the literature on the microeconomic consequences of carbon trading systems. Second, this paper has some policy implications by discussing the heterogeneity of ETS effects at firm and regional levels. We find that ETS had a greater impact on non-state-owned enterprises, suggesting that the government should support the transformation of non-state-owned enterprises by providing targeted assistance for complying with carbon-trading regulations and promoting green economic growth. Additionally, we find that ETS is more effective in economically developed areas with good governance capacity, which means that the government should tailor local carbon trading policies to each region’s governance and economic conditions and avoid a one-size-fits-all approach.
Australian scientists have pioneered a new method to assess the long-term risks posed by toxicants such as insecticides in rivers and the ocean.
This study is pleased to present a seminal study examining reserve management strategies across 45197 company-line-year observations from 2000-2012. The research pioneers line-of-business-level analysis to disentangle insurers' multidimensional incentives—tax optimization versus solvency management—through structural reserve adjustments. Employing two-way clustered fixed-effects models and regulatory policy shocks, the study establishes causal evidence of strategic reserve allocation patterns previously undocumented in actuarial literature.
In a Policy Forum, Jessica Espey and colleagues argue that waning support for accurate collection and curation of population data worldwide threatens to compromise crucial evidence-based government planning. “We live in an era of seemingly unlimited data, where our digital activities may generate nearly constant information streams, yet some of our most essential infrastructure – demographic information – is deteriorating, introducing known and unknown bias into decision-making,” write the authors. Accurate population data are fundamental to effective governance. Most countries rely on national censuses, which are traditionally conducted every 10 years, to supply this information. But according to Espey et al., fewer nations are completing censuses, and many are undercounting marginalized populations. For example, at the close of the 2020 census cycle, 204 countries or territories – encompassing 85% of the world’s population – had conducted at least one census between 2015 and 2024. Yet by July 2024, 24 of these, representing roughly one-quarter of the global population, had not published their findings. This reflects a significant decline from the 2010 round, when 214 countries conducted and released census data, encompassing 93% of the global population. Moreover, even when censuses are carried out, they increasingly suffer from declining response rates and growing coverage errors – particularly in the undercounting of vulnerable populations such as ethnic minorities and young children. In the United States, for instance, the 2020 census likely missed nearly 3 million Latino individuals and close to 1 million children under the age of five.
In this Policy Forum, the authors outline several reasons for this general decline: eroding trust in institutions, COVID-19 disruptions, budget cuts to statistical offices, and collapsing international support for data collection programs. In order to address this “quiet crisis,” Espey et al. suggest adopting register-based systems, harnessing geospatial technologies and AI, and producing small-area population estimates. However, technical innovations alone are not enough, note the authors; governments must also restore public trust by showing how data informs daily life, ensuring strong privacy protections, and promoting collaboration across sectors. “In an era of growing challenges, from climate change to economic inequality, accurate population data are not a luxury – they are essential infrastructure for healthy, resilient, functioning societies,” write the authors.