Can Setting Up a Carbon Trading Mechanism Improve Urban Eco-Efficiency? Evidence from China

Round 1

Reviewer 1 Report (Previous Reviewer 2)

Thanks for the invitation. I'm sorry that my comprehensive comments were rejected. In particular, based on my last round of comments, I think some key questions have not been answered.

For example, we need to explain why ecological efficiency is suitable as a dependent variable to evaluate carbon policy. Can we use ecological efficiency to evaluate the effects of any policy? Moreover, the construction of the ecological efficiency index itself is not complete. It is not enough to list many documents to explain the rationality of using indicators. What is important is the logical statement. Obviously, the author did not meet my requirements in this round

In addition, the parallel trend test mentioned earlier has serious problems, which has not been explained. A statistically significant effect shift has occurred in the year before the policy impact, but the author claims that this is basically in line with the parallel trend hypothesis. The author explains that the policy lag effect has nothing to do with the parallel trend, and that the lag effect should occur after the impact. I cannot pass such a key issue.

Author Response

尊敬的审稿人，我们已经在文档中回答了您的问题。

Author Response File: Author Response.pdf

Reviewer 2 Report (Previous Reviewer 4)

The present paper, “Can setting up a carbon trading mechanism improve urban eco-efficiency? Evidence from China,” is suitable for publication in the sustainability journal after major revision.

Some concerns are as follows:

1.     Abstract

     Authors must report the study duration and the number of investigated cities in the abstract. Moreover, it must be closed with policy implications.

2.     Introduction

     This section is not well justified and should be restructured to conform to the scientific paper structure. Furthermore, it specifically failed to describe the study’s novelty and elucidate the research objectives and questions.

     In addition, the authors are required to back up their claims with some supporting evidence. For instance, they must cite relevant references to lines 34-39.

     It is strongly advised that the authors move the literary review from the introduction to the new section titled “literature review” to figure out where the research is lacking and how unique their study is. 

     The introduction needs to be closed with the structure of the rest of the paper.

3.     Theoretical analysis and research hypothesis

     The “carbon trading pilot policy” definition must move to the introduction.

     The hypotheses must be restructured. Finally, the authors must clarify each hypothesis by citing the recently relevant research study.  

4.     Study design

     The authors must briefly describe each step followed in the research procedures.

     The authors strongly recommended justifying equations with appropriate references.

     What are the differences between the two subheadlines in the “Sample and variable selection” section that have been identified as explanatory variables? Furthermore, the eco-efficiency was calculated using the Zanehale Duman (2022) model. So what is their contribution to that research? In addition, they must report the source of explanatory, mediatory, and control variables. Finally, indicators must be chosen based on the literature review and follow the theoretical background.

     The employed model must be scientifically modified with proper arguments. Moreover, they must explain the advantages of the methodology used in the current study.

5.     Analysis of empirical results and robustness tests

     This section is lengthy; therefore, it must be shortened and be related to newly published research (from 2019 onward).

6.     Conclusion and policy implications

     It must go more profound; it would be more interesting if the authors focused more on the significance of their findings; the barriers to doing it; the consequences, in the real world, in changing the observed situation, what would be the ways, in the real world, to change/improve the observed situation. Finally, the authors must propose the practical policy implication (action plans) than the general recommendations. Moreover, these sections are lengthy and must be revised and be shorten.

 

7.     The paper must clearly express its case, measured against the technical language of the field and the expected knowledge of the journal’s readership. Therefore, attention must be paid to the clarity of expression and readability, such as sentence structure, jargon use, and acronyms.

Author Response

Dear reviewers, we have responded to your questions in the document.

Author Response File: Author Response.pdf

Reviewer 3 Report (New Reviewer)

Minor observations

Line 23 and the rest of the paper. References must be numbered as they are mentioned in the paper, from 1 to 48, and ordered like this in the References section. See Template.

Line 140. A paragraph cannot consist only of a figure. All tables, equations and figures must be announced before. Announce the figure and briefly comment on what it contains.

Line 159. “Where” is left aligned and with “w”. Valid for the whole paper.

Eqs (2) and (3). Explain all the variables. Valid for the whole paper.

Line 202. Make some comments on figs (5) and (6).

Line 215. Reformulate “This is shown in the following table.” As “This is shown in table 2”.

Line 240. Reformulate “…the following table.” As “… table 3”. Same for the whole paper.

Table 3. Separate different types of variables with lines.

Line 266. Announce Table 4.

Line 309. Announce Table 5.

Announce all the tables before.

Respect Template for Reference section.

Author Response

Dear reviewers, we have responded to your questions in the document.

Author Response File: Author Response.pdf

Reviewer 4 Report (New Reviewer)

The overall structure of the thesis is reasonable, the logic is clear, and the method is appropriate. It is proposed that this paper may be published after revision:

1、Specific units and specific descriptions of variables should be added to Table 3.

2、The scale bar needs to be increased in Figure 2.

3、The value of Moran's index is only 0.093, which is less than 0.1, which shows that it is unnecessary to adopt a spatial econometric model.

4、Moran index and Geary's c, just use one of them.

5、The paper needs to add a discussion section

Author Response

Dear reviewers, we have responded to your questions in the document.

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report (Previous Reviewer 2)

The article is improved，no further comments this round

Author Response

Thank you very much for your review. It not only improves our articles but also helps us learn more. 

Reviewer 3 Report (New Reviewer)

Table 1, first line: Author name for reference [6] must be written in English. Also, at Lines 530-532, the text must be translated in English.

Lines 157, 176, 189, 211… After the equation, “Where” is aligned left and with “w”.

Eq. 3. Explain the argument of the function “mv”.

Congratulations!

Author Response

We have made changes according to your requirements and adjusted the table's width and the text expression's consistency. Thank you very much for your review. It not only improves our articles but also helps us learn more. 

Reviewer 4 Report (New Reviewer)

The author has improved the paper in many aspects. Good luck.

Author Response

非常感谢您的评论。它不仅可以改进我们的文章，还可以帮助我们了解更多信息。

This manuscript is a resubmission of an earlier submission. The following is a list of the peer review reports and author responses from that submission.

Round 1

Reviewer 1 Report

This manuscript investigates the impact of the pilot carbon emissions trading policy on the eco-efficiency of its implementation cities and neighbouring cities using DID, PSM-DID and spatial double difference methods. The manuscript has proposed three hypotheses and designed relatively rigorous experiments to test them. The overall research of the paper is reasonable, but there are some aspects that need to be optimized. The specific suggestions are as follows.

1. In Part 2:The third hypothesis lacks detailed elaboration, please supplement it appropriately.

2. In Part 3.3:The paper uses the model in Zanehal Duman’s article to measure urban eco-efficiency. Why did you choose this model? What are the advantages of this model compared with models?

3. What does item(1) (2) (3) (4) and (5) in Table 3 refer to? How are the data of different items considered?

4. Figure 3 is not complete without legend, please mark the contents referred to by different polylines.

5. There are many punctuation errors in the manuscript. For instance, On line 100,“"In 2018, Xiang Yonghui [22] pointed out that low-income areas have a stronger urge to develop their economies and local governments are more inclined to relax environmental regulations, thus making them more prone to become pollution havens. local governments are more inclined to relax environmental regulations and thus are more likely to become pollution havens.” The sentence begins with ", but where is another one？And there is a lack of full stops at the end of many sentences in the manuscript. Please check them.

6. Several references in the manuscript are cited incorrectly, for example, [Error! Reference source not found] is prompted on line 57, line 96, line 187. This is inappropriate. Please check the error.

7. On line 162, this passage was labeled No.2, but where is No.1?

Reviewer 2 Report

Thanks for the editor's invitation to review the manuscript. My comprehensive attitude towards this article is: Major revision

In general, this article is interesting and normative, especially in accordance with the requirements of DID in the analysis process, and further discusses space spillovers, which is also relatively sufficient in theoretical analysis. Because of the relatively standardized hypothesis testing process, I think the author's analysis results are reliable. However, the author needs to adjust the writing logic, especially the some concepts and indicators has not been effectively discussed in theory. The specific opinions are as follows:

L1 What is market-inspired? This noun even appeared only in the title without explanation in text. As we all know, regulations often come from the government. This title has caught my appetite: I really want to know how the author analyzes the relationship between the market and the government, but the author did not even mention it in the introduction. In addition, in the introduction, the author is almost completely talking about very specific carbon trading issues, so I think the title seems to exaggerate the contribution of this article. Carbon trading is indeed a form of resource allocation based on the government's quota limitation and stimulating the market to optimizing resource, but this does not mean that carbon trading can reflect all market-inspired regulation issues claimed by authors, and it requires theoretical discussion. Otherwise, the author should focus on the impact of carbon trading on ecological efficiency in title, but this will also greatly limit the significance of this discussion to a specific field and weaken the generalization of the author's contribution. The author needs to make trade-offs and modifications

L149 Non Chinese scholars may not know the leading role of The 18th Party Congress in China, which requires a brief explanation of the of the conference to international scholars in at least one or two sentences

L190-196 Is there comparability between digital economy and carbon trading? It seems that the digital economy does not belong to the market-inspired regulation that is not advocated by the author. What is the significance of this analogy?

L207 I very much agree with the author's concentrated presentation of two mechanisms and one expansion analysis (spatial spillover) in theoretical analysis, which makes me understand all the analyses the author wants to discuss at a glance. In the same way, I also suggest that the author summarize the regression of all the mechanism analysis to the front to form a complete analysis framework (similar to the formation of a special method chapter), rather than scattered in the following chapters, which will undermine the readers' overall understanding of the author's analysis ideas.

L241 The author tries to use ecological efficiency to characterize the policy effect. Please consider these questions: Is ecological efficiency the full significance and value of China's promotion of carbon trading? Why can this indicator represent the effect of promoting carbon trading policies? What are its inevitability or advantages over other policy effectiveness indicators? At present, the author only gives the academic definition of ecological efficiency and relevant existing research in the introduction, but the logic of this indicator in theory is not highlighted.

L325 The statement here is obviously inconsistent with the picture. The confidence interval of the effect value one year before the policy was implemented (- 1) and the year when the policy was implemented (0) obviously does not contain a value of 0. How can this be called an insignificant? Although I believe that event research methods in the social science field are really difficult to achieve perfect control of the control group (the current effect value fluctuation is acceptable to me personally), the author cannot distort the data facts in the text for the ultimate purpose of forming quasi experimental conditions.

Please focus on all references. This may be caused by the document management software. Some documents have shown [Error! Reference source not found.]

Reviewer 3 Report

This study presents a case study of the relationship between market-inspired environmental regulation and urban eco-efficiency, provided the evidence from China. The topic is interesting and practical, but I recommend the authors to address the following issues:

1. 3.3 The title of the explanatory variable is incorrectly translated into the explanatory variable；

2. There have some mistake with the use of the SDM. First of all, the right side of the equation of the SDM should include three parts, namely the explanatory variables of the local region, the explanatory variables of the adjacent region, and the explanatory variables of the adjacent region. The explanatory variable in this paper is ecoefficiency, which is a dummy variable, with two other intermediary variables and four control variables. If the spatial overflow is only to see whether the eco-efficiency has overflow between regions, there is no need to use the SDM, just use the SAR model; If you want to analyze whether the factors affecting eco-efficiency in the local area also affect the eco-efficiency of adjacent areas, then you should use the SDM, considering that the explanatory variable in this paper is a dummy variable, and it has been concluded through intermediary analysis that policies affect eco-efficiency through technological progress and industrial restructuring, then it is more appropriate to choose these two intermediary variables in the SDM to replace the original explanatory variable of policy, secondly, If the dummy variable of policy implementation is still used as the explanatory variable in the SDM, the problem is that the coefficients obtained are difficult to explain without practical significance, and finally, the control variables are not suitable for weighting, and the impact of the control variables on the eco-efficiency of other regions in terms of variable cost areas is inconsistent with the purpose of setting the control variables themselves. In fact, this dummy variable is not unusable, but the formula needs to be changed on the existing basis.

Reviewer 4 Report

The present paper, “Can market-inspired environmental regulation improve urban  eco-efficiency? -Evidence from China,” is not satisfactory to get published in the sustainability Journal. I have some concerns as follows:

1.     Abstract:

     Aim and background, motivation, novelty, hypothesis, methodology, findings, and conclusions should each be expanded to their own phrase in the revised abstract. There's no need to elaborate on the research questions or findings.

     The authors have broken the rule of the abbreviation. For instance, the NRDC abbreviation is superfluous because it has only been referenced once in the abstract. Even though the name of the model (Difference-in-Difference with Propensity Score Matching, or DID-PSM) is pretty clear, the authors are still required to write out the full name. 

     It is lengthy and exceeds the journal's limitation.

2.     Introduction:

     This section is not well justified. The authors are required to back up their claim with some supporting evidence. For instance, they must cite relevant references to lines 29–50; 135-148;

     There are some referencing errors, which mention that “Error! Reference source not found,” throughout the paper. It is suggested that the authors look it over and change it so that it fits the reference style of the journal. 

     It is lengthy and should be edited to conform to the scientific paper structure. It specifically failed to describe the literature gap and the novelty of this study and to elucidate the research objectives. It is strongly advised that the authors move the literary review from the introduction to the theoretical analysis. Moreover, it must be reviewed and restructured. It is suggested that the authors make a table that summarizes the previous studies so that they can figure out where the research is lacking and how unique their study is. 

3.     Theoretical analysis:

     Do the authors propose the hypothesis, or do they intend to investigate the statement's accuracy?

     The hypotheses are lengthy, and the authors must shorten them.

4.     Study design:

     The authors must provide a brief description of each step followed in the research procedures.

     The authors are strongly recommended to include the equation in the main text and to back up their claims with references in core model setting.

     What are the differences between the two subheadlines in the "Sample and variable selection" section that have been identified as explanatory variables? Furthermore, the eco-efficiency was calculated using the Zanehale Duman (2022) model. So what is their contribution to that research? Finally, they must report the source of explanaotry, mediatory, and control variables.

     The employed model must be scientifically modified with proper arguments. Moreover, they must explain the advantages of the methodology used in the current study.

5.     Analysis of empirical results and robustness tests

     This section is lengthy and it must be related to newly published research (from 2019 onward).

6.     Conclusion and policy implications

     It must go more profound; it would be more interesting if the authors focused more on the significance of their findings; the barriers to do it; the consequences, in the real world, in changing the observed situation, what would be the ways, in the real world, to change/improve the observed situation. Finally, the authors must propose the practical policy implication (action plans) than the general recommendations. Moreover, these sections are lengthy and must be revised and be shorten.

The paper must clearly express its case, measured against the technical language of the field and the expected knowledge of the journal’s readership. Therefore, attention must be paid to the clarity of expression and readability, such as sentence structure, jargon use, acronyms.