LAUSR

The pilot carbon emission trading scheme in Guangdong Province (GD ETS) of China has fulfilled seven compliance periods, and its potential impact on regulated firms has drawn increasing attention. This article empirically investigated the impact of the ETS on firm behaviors and competitiveness (i.e., cost competitiveness and green competitiveness) by surveying all power firms in the GD ETS. Low-carbon management, carbon asset transactions, and energy saving and emission reduction technology were identified as firm behaviors. The relationships among the ETS, firm behaviors, and firm competitiveness were tested by using bootstrap multiple mediation analyses. The results showed that the GD ETS has a positive impact on firm behaviors. The three examined firm behaviors actually reflect the depth of firm participation in the ETS. The more the firm participates, the greater the mediating effects that the firm behaviors exert on firm competitiveness are. Both carbon asset transactions and energy saving and emission reduction technology have a mediating effect on the relationship between the GD ETS and cost competitiveness, while only the latter mediates the relationship between the GD ETS and green competitiveness. Implications for policy makers and firm operators were discussed.