Lin Zhang

City University of Hong Kong | CityU · School of Energy and Environment

This paper examines the effects of knowledge diffusion on growth and the costs of climate policy. We develop a general equilibrium model with endogenous growth which represents knowledge diffusion between sectors and regions. Knowledge diffusion depends on accessibility and absorptive capacity which we estimate econometrically using patent and cita...

Although China committed to reduce its energy and emission intensity, the allocation of such national targets in the provincial level is still a political negotiation process and lack of a systematic principle from the perspective of efficiency. This paper proposes an allocation principle based on the efficiency levels. The efficiency levels are es...

We study theoretically and numerically the effects of an environmental tax reform using endogenous growth theory. In the theoretical segment, mobile labor between manufacturing and R&D activities, and elasticity of substitution between labor and energy in manufacturing lower than unity allow for a growth dividend, even if we consider preexisting ta...

This paper analyzes the impacts of carbon intensity control introduced by China's National Plan on firm competitiveness. By exploiting plausibly exogenous variation in the mandates on carbon intensity reduction across locations, we find that the exposure to mandate significantly decreases firm's energy intensity, but does not affect firm competitiv...

Economic development under restricted resource availability has become a complex challenge for both developing and well-established economies. To maintain a sustainable electricity supply and mitigate the impact of water shortage on economic development, it is therefore important to understand how utility firms respond to the change in water availa...

The literature provides mixed evidence on whether the public supports foster or fail to promote innovation. This paper explores why the effects of government R&D subsidies on corporate innovation performance vary across firms. We rely on publicly listed firms in China and find that government subsidies promote technology innovations in firms specia...

In view of its aging population, China initiated in 2012 a relaxed birth control policy after a three‐decades‐long implementation of the restrictive one‐child policy. This paper examines how China's relaxed birth control policy leads to gender inequality. It specifically focuses on migrant workers because they account for a significant portion of t...

This study employs the recently developed conditional nonparametric frontier approach to assess the impact of environmental expenditures associated with environmental information disclosure (EID) on the production of China’s listed manufacturing firms from 2010 to 2018. An inverted U-shaped relationship is found between environmental expenditures a...

This study provides a political economy explanation for the recently increased stringency of China's environmental policy. Specifically, we argue that prior to 2009, bribery from polluting firms was relatively successful in persuading local regulators to implement weak environmental policies. Since that time, pollution has reached a threshold that...

Hong Kong has planned to achieve zero-carbon emissions before 2050. Hong Kong's building sector is responsible for approximately 60 % of carbon emissions, while its evolutionary trajectories and neutrality pathway remain unclear. To this end, we adopt the STIRPAT model and machine learning approach to identify the most relevant factors and determin...

China's remarkable economic progress over the past three decades has been complemented by massive energy consumption. Although coal has long been the primary energy source, the rise in crude oil use has been viewed as more contentious, because a large portion of crude oil is imported, whereas the economy is mostly self-sufficient in coal. We examin...

Understanding the mechanism of public perception and behavior towards environmental goods provision is essential for effective sustainable governance. This paper studies how citizens' self-reported environmental knowledge affects their trust in public service providers and subsequently their decisions about accepting the provision of a pollution ma...

Climate change entails potential risks for investors, and its effects on investment has spread beyond physical borders. This study investigates how multinational corporations (MNCs) incorporate climate risks into their decisions regarding foreign direct investments (FDIs). We find that large differences in the climate risks of home and host cities...

While it is well-established that air pollution damages health and inhibits productivity, the political cost of air pollution remains poorly understood. We estimate the causal effect of air pollution on political trust in local government in China, which underpins the stability of the authoritarian state. Combining a nationally representative and l...

The United Nations predicts that over 40 % of the world's population (3.9 billion) would suffer from severe water deficiency by 2050, indicating that global water disequilibrium and deficiency will intensify, creating challenges for national and regional water supplies. With per capita water resources at a quarter of the world average level, China...

Wastewater reclamation and reuse projects have been gaining significant attention as ways to secure sustainable water resources while preventing environmental degradation. However, traditional cost-benefit analyses do not reflect the true net benefits of these processes as they do not consider all externalities, particularly due to the difficulties...

In this article, we discuss the challenges and opportunities on Hong Kong's strategies for combating climate change in four sectors including power generation, building, waste management, and finance. We highlight the importance of improving its climate change mitiga-tion capacity through regional collaboration.

An effective and sustainable management of carbon market requires a systematic control of associated risks. In this study, we use the Meta-analysis to explore the driving forces of carbon market risk based on 144 estimates reported in 35 primary studies. Moreover, we capture the sources of heterogeneity via the Meta-regression analysis. The perspec...

Internal carbon pricing (ICP) has emerged as an increasingly popular tool for firms to cut emissions and combat climate change risks. We theorize the role of ICP by integrating legitimacy and stakeholder perspectives into dynamic capability theory. We argue that firms implement ICP to comply with stakeholders’ expectations, leading to corporate env...

Municipal solid waste (MSW) charging is a method of waste management that involves charging residents for garbage disposal. Due to the increasing levels of MSW, Hong Kong has planned to implement an MSW charging scheme in 2023. This paper evaluates the potential efficacy and challenges of an MSW charging scheme in Hong Kong. We first summarize the...

Sentiment analysis technology has made it possible to precisely calculate the daily reactions and opinions of investors, which has been found to have a significant influence on financial asset pricing. Thus, in this study, we examine the extent of predictive power investor sentiment has over the price of China's crude oil. We first constructed inve...

The journal Frontiers in Energy Research has provided an international platform for green energy communications. This collection reveals how cognitive biases can arise from monotony of value, from oversimplification in the analysis of green energy development and from ignoring the voice of consumer and the public. Therefore, this special issue poin...

We examine the causal effect of foreign direct investment (FDI) on educational attainment through the lens of gender segregation in China. Using a comprehensive dataset for the 1985–2014 period and controlling for endogeneity, we find that a more prominent FDI presence causes higher educational attainment, particularly for women. Moreover, we show...

Climate change entails potential risks for investors, and its effects on investment has spread beyond physical borders. This study investigates how multinational corporations (MNCs) incorporate climate risks into their decisions regarding foreign direct investments (FDIs). We find that large differences in the climate risks of home and host cities...

The increasing amount of municipal solid waste (MSW) is not only a challenge to our society, but also an opportunity for regional sustainable development. In this paper, we estimate the energy potential of waste through two different waste disposal methods, landfills and incineration, by the years 2030 and 2060, using the Greater Bay Area of China...

This paper applies the fixed effects and the difference-in-differences models to explore the impact of government subsidies on the innovation investment of new energy firms by the financial information of China's listed companies from 2007 to 2017. The empirical results demonstrate that the subsidy scale of new energy enterprises has an inverted U-...

The massive construction of buildings has changed the city’s aquatic ecological environment. The aquatic ecological condition of the city has been deteriorated with serious water issues. To coordinate various departments to jointly build the sponge city and improve the water environment, the Shenzhen government formulated the policy note on “Interi...

This paper examines the environmental effect of political connections at the individual and organizational levels. We integrate political connections at both levels in a four-stage game-theoretic framework to study the political interplay between an entrepreneur, a bureaucrat and a government. We distinguish individual-level political connections f...

Desiccant dehumidification is an alternative solution for independently processing air humidity, which can simultaneously accommodate the sensible and latent heat loads even in high-humidity areas (e.g., Hong Kong). However, there is still a lack of comparative investigation in practical applications between the traditional condensation dehumidific...

This paper examines the environmental effect of political connections at the individual level and the organizational level. We integrate political connections at both levels and construct a four-stage game theoretical framework to study the political interplay between an entrepreneur, a bureaucrat and a government. We distinguish individual-level p...

We study the effect of human capital on CO2 emissions using the Chinese provincial panel over the period 1997–2016. Allowing for cross-sectional dependence and structural breaks, we find a negative association between human capital and CO2 emissions in the long run and attribute it to the influences from younger workers and workers with advanced hu...

In this paper, we employ a directional distance function to estimate the opportunity cost arising from environmental regulations in China's industrial sector. The change of opportunity cost is decomposed mathematically into two components including technical change and input change. Our results show that the opportunity cost attributed to environme...

Avoiding dirty asset stranding matters for protecting wealth and employment in the economies that are rich in pollution-intensive fossil energy and resource assets. This paper analyzes, empirically and theoretically, the mechanism for energy transition without dirty capital stranding. We show that a shock that tightens pollution regulations will le...

This paper measures the performance and efficiency dynamics of provincial water use by differentiating the long-run persistent efficiency from the short-run transient efficiency. We combine the econometric frontier approach with panel Markov-switching and Tobit estimations to investigate the macro level data over the period 2002-2016. The result re...

In this paper, we construct a unique database for 1228 residential buildings in Hong Kong to investigate how the spatial features of these residential buildings affect the electricity consumption in the communal area. We choose Hong Kong for this analysis as the city owns a large number of standard-type residential buildings managed by the public i...

This paper investigates the contemporaneous and long-term effects of tropical cyclones and the related policies on economic growth and associated structural changes. We consider three distinguishing features of tropical cyclones, including wind speed, precipitation, and storm surge height, as well as one policy-related feature of tropical cyclones...

Economic development under restricted resource availability has become a complex challenge for both developing and well-established economies. To maintain a sustainable electricity supply and mitigate the impact of water shortage on economic development, it is therefore important to understand how utility firms respond to the change in water availa...

Climatic conditions can exert significant impacts on energy demand of residential buildings. Therefore, real-case evidence is necessary for aiding local policy making on building energy performance. By designing and carrying out in-situ monitoring campaigns respectively in Cambridge, Hong Kong and Shanghai, we present in this paper a cross-regional...

We examine the causal relationship between local financial intermediate (LFI) and foreign direct investment (FDI) in China. Using the only data available on LFI from 166 Chinese cities over the period 2003–2009, and addressing endogeneity in the relationship, we find that a 1% improvement in LFI raises FDI in a representative city by 3.77%. Use of...

We study the effect of human capital on CO2 emissions using the Chinese provincial panel over the 1997–2016 period. Allowing for cross-sectional dependence and structural breaks, we find a negative association between human capital and CO2 emissions in the long run and attribute it to the influences from younger workers and workers with advanced hu...

This paper studies the effectiveness of pollution control in urban China by constructing a two sub-system analysis: household pollution control subsystem and industrial pollution control subsystem. We integrate slack-based model with undesirable outputs to estimate the pollution control efficiency in two subsystems for Chinese provinces from 2011 t...

Stable energy supply with high quality infrastructure is vital for sustainable energy consumption and inclusive growth. In this paper, we develop empirical methods to evaluate the extent to what energy infrastructure improvement towards inclusive growth, which help guide policy development to achieve Sustainable Development Goals. By investigating...

The outbreak of coronavirus and its associated quarantine policy have lowered China’s carbon emissions by over 184 million tons per month. Such reduction is expected to persist in the long run through structural change of energy mix and the digitalization of its economy. We shall work together and turn current health crisis into an opportunity for...

By using the data of 30 provinces from 1998 to 2016 in China, this paper estimates the water rebound effect in the agricultural crop farming by combining Slacks‐based Measure (SBM‐based) of Malmquist Index and Logarithmic Mean Divisia Index (LMDI) method. We find that the average water rebound effect is 70.3%, implying that over two‐thirds of the w...

This paper explores the role of political connection on the overinvestment of Chinese energy firms. We argue that political connection can act as a “helping hand” that enables energy firms to obtain more government support to invest and a “grabbing hand” that forces politically connected energy firms to heavily overinvest for the promotion benefit...

As a measure of building envelope performance, Overall Thermal Transfer Value (OTTV) has been regulated in many countries and regions in the world, while little research is done to evaluate its city-scale effect with energy consumption. In this paper, we develop an econometric energy epidemiology model to evaluate the impact of OTTV legislations on...

Tradable green certificate (TGC) systems are increasingly used to promote renewable energy generation and mitigate greenhouse gas emissions. In this paper, we investigate the performance of the optimal renewables policy under full separation and full integration scenarios for two countries with TGCs. Our analysis suggests that under full separation...

Abstract This paper studies the growth impacts of realizing two long-term carbon targets in Switzerland (reducing CO2 emissions in 2050 by 72% and 80% relative to 1990 levels) with alternative steering-based climate policies that include a uniform tax on the whole economy and differentiated tax schemes. For this analysis, we use the Computable Indu...

We explore the dynamic interaction between housing prices and air quality in a growing economy with changing preferences using panel vector auto-regression. Using Chinese data, we document robust evidence that better air quality is rewarded by the market with higher housing prices and that faster housing price growth in turn contributes to further...

Low carbon technologies (LCTs) have been widely developed in recent years. However, the classification of LCTs varies across academic studies, business insights, governmental directives and reports from institutions worldwide, and depends on the disciplines. A lack of common knowledge makes it difficult to coordinate and enhance interdisciplinary d...

In this paper, we estimate the energy efficiency of educational buildings with the case study of buildings in City University of Hong Kong by constructing an energy demand stochastic frontier model. The model is estimated by using the university statistical data from 2011 to 2015. For the consistent frequency of data among the variables, we have ad...

This article provides an economic investigation into the underlying causes of industrial wastewater emissions. We examine the direct and the structural break-induced effect of national environmental regulation on industrial wastewater emissions. The results show that strict environmental regulation can partially offset the energy-induced effects im...

This paper estimates the linkages among total Sulphur dioxide (SO2) emissions, total GDP and energy efficiency using China’s provincial panel data from 2002 to 2015. We investigate total emissions rather than per capita emissions or ambient concentrations, since it is total emissions that the environment cares about. Energy efficiency is estimated...

“Smart Food Waste Recycling Bin” (S-FRB) systems have recently been developed to facilitate the transformation of food waste into an end-product suitable for use as an energy resource following circular economy principles. This decentralized waste decomposition system utilizes fermentative microorganisms for the treatment of organic food waste and...

The Shanxi province faces “resource curse” as a result of over-exploitation and waste. The objective of this paper is to comprehensively study how and to what extent the influence of the production and consumption of coal on industrial pollution intensity, as well as the determinants of industrial pollution intensity in the long run. This study pri...

We examine whether local credit conditions and foreign direct investment (FDI) are complements or substitutes, using data for 166 centrally-administered and prefectural cities in China over the period 2003–2009. We find that local credit conditions and FDI are complements and establish that causality runs from local credit conditions to FDI. When w...

This study examines the energy efficiency transitions in China using provincial data covering the period 2003-2015. Sustainable progress in energy efficiency achievement is beneficial to energy security and the achievement of the Paris Agreement. This article combines the stochastic frontier method with the panel Markov-switching regression to mode...

China's 11 th Five-Year Plan introduced various policy instruments to address carbon mitigation; however, the ex-post policy impacts need to be investigated in a scientific and systematic way to guide future policy design. In this paper, we estimate the impacts of the heat metering and energy efficiency retrofitting policy (HMEER) on residential en...

The objective of this study is to examine the role of technology development and self-reliance in oil production on China’s oil import function from 1986 to 2014. Using the autoregressive distributed lag model (ARDL), we find that technology development reduces oil imports in the long run. However, we find oil imports to be independent from self-re...

We construct a framework for investigating the effects of knowledge on industry performance. Using Chinese provincial industry data from 2000 to 2012, we decompose total factor productivity (TFP) change into the four components of embodied technical change, disembodied technical change, scale efficiency change, and technical efficiency change. Our...

We construct a framework for investigating the effects of knowledge on industry performance. Using Chinese provincial industry data from 2000 to 2012, we decompose total factor productivity (TFP) change into the four components of embodied technical change, disembodied technical change, scale efficiency change, and technical efficiency change. Our...

This study examines the effect of the regulation-induced structural break on the nexus between industrial pollution intensity (IPI) and energy use structure in China. Using six industrial pollutants intensity, IPI indicator is derived from Principal Component Analysis. The study applies three types of time series based approaches, including Fully-M...

This study assesses the long-run relationship and short-run dynamics between foreign direct investment (FDI) and energy consumption in China. Applying the bounds testing approach to annual data from 1982 to 2012, we find that a stable FDI–energy nexus exists in the long run and a 1% increase in FDI reduces energy consumption by 0.21%. However, this...

There is widespread concern that a stringent international climate agreement will not be reached because it would imply too high costs for fast growing economies. To test this hypothesis we develop a general equilibrium model with fully endogenous growth and estimate the policy cost for China. The framework includes disaggregated industrial and ene...

As China is moving toward an innovation-driven economy, this paper offers new insights for both policymakers and investors to optimize the effectiveness of investment performance. This paper studies China's provincial research activities with a focus on the spillover-induced productivity and efficiency change. The results show that spillovers as a...

China is one of the largest energy consumers and CO2 emitters globally. The growth rate of energy consumption in China is about 6 % per year, and it consumed 21 % of the world’s total energy in 2012. In recent years, the Chinese government decided to introduce several energy policy instruments to promote energy efficiency. For instance, the reducti...

To analyze the operational efficiency of Chinese power sector at the provincial level, this paper studies the convergence of technical efficiency and productivity growth of electricity across 29 Chinese provinces during the period 1996-2008 using several convergence models. Depending on the model being employed, we find evidence of convergence of o...

In this paper we investigate the long-run economic consequences of phasing out nuclear energy in the presence of stringent climate policies. We integrate endogenous growth theory and technology-based activity analysis into a dynamic numerical general equilibrium model. Both market-based and policy-mandated nuclear phase-out are studied. Using data...

This paper examines the effects of knowledge diffusion on growth and costs of climate policy. We develop a general equilibrium model with endogenous growth which represents knowledge diffusion between sectors and regions. Knowledge diffusion depends on accessibility and absorptive capacity which we estimate econometrically using patent and citation...

There is widespread concern that an international agreement on stringent climate policies will not be reached because it would imply too high costs for fast growing economies like China. To quantify these costs we develop a general equilibrium model with fully endogenous growth. The framework includes disaggregated industrial and energy sectors, en...

Please check and cite the published version: L. Bretschger and L. Zhang (2017): Nuclear phase-out under stringent climate policies: A dynamic macroeconomic analysis. The Energy Journal, 38(1), 167-194. https://doi.org/10.5547/01956574.38.1.lbre