Energy Economics and Environmental Management

Laboratory of Energy Economics and Environmental Management

Established in 2017, EEEM Laboratory is the first and by far the only effort in Hong Kong S.A.R. dedicated to economic analysis of energy and environmental issues.

EEEM focuses on two broad fields: Sustainability and Productivity. In Sustainability, we study how to achieve sustainable economic growth, how to set up fine institutions to support sustainable development, and how to design environmental regulations for Sustainability. In Productivity, we answer research questions related to Productivity and Efficiency, with particular interest in energy use, the carbon market, and the water sector.

EEEM is an international team with researchers from various educational backgrounds, including economics, management, public policy, engineering, and governance. EEEM extends its presence in different continents through its strong international collaborations.

Call for Ph.D. Applications

The E3M laboratory is inviting applications from highly motivated individuals interested in pursuing a Ph.D. degree.
Our research endeavors revolve around cutting-edge fields, including Energy and Sustainable Development, Green Business and Finance, Climate Change and Economic Growth, Environmental Management, and Sustainable Development Strategies.
We offer a stimulating and collaborative research environment, providing ample opportunities for academic growth and professional development.

View Details

News

View News Archive

Prof. Zhang approved for Basic Research Special Fund

On November 5th, Prof Zhang was approved for the 2024 Annual Basic Special Research (Shenzhen Natural Science Fund) General Program. The research program is A study on the income distribution effects of emission reduction policies under carbon neutrality goals. [Nov. 2024]

E3M members selected for the Hong Kong Scholars Program

Dr. Ruting Wang from Sun Yat-sen University has successfully been selected for the 'Hong Kong Scholars Program' to join Professor Zhang Lin's team. The project is set to last for two years. She is one of the two economists endorsed among all applicants. [Sep. 2024]

The 48th IAEE International Conference

The 48th IAEE International Conference Will Be Held in Hong Kong SAR in the Summer of 2027 with A Theme of Reshaping Energy for the Future.

E3M Seminars

View All E3M Seminars

E3M Pre Series 2: Environmental regulation and zombie firms: The case of China

Lecturer Dr. Yunguo Lu from Zhejiang Sci-Tech University will deliver an academic lecture to us on his latest research findings on the relationship between environmental regulation and zombie firms.

E3M Pre Series 1: Evaluating socio-economic and subjective well-being impacts of coal power phaseout

Associate Professor Zhang Hongyan from China University of Petroleum (East China) will deliver an academic lecture to us on her latest research findings on the social and economic impacts of coal power phase-out.

E3M Seminar #8: Kick-off Seminar of the NSFC-RGC Joint Research Project

Professor Wenji Zhou and his research group from the School of Applied Economics, Renmin University of China, will be visiting CityUHK to share the latest research progress on the joint NSFC-RGC research project titled "Asset-stranding Risks of Energy Firms under Carbon Neutrality Goals and the Spillover Effects on Capital Markets in Mainland China and Hong Kong". All are welcome!

Publications

View all publications

Path dependence in environment-related innovation: evidence from listed firms in China New

Appl. Econ., Sep'2024

Wei Jin, Meifen Ma, Lin Zhang

This paper studies the path dependence effect in corporate innovation based on the patent data of Chinese listed firms. The results provide robust evidence of the path dependence in technology innovation. The accumulated stock of brown patents reduces the ratio of green patents to total patents newly granted, thus inhibiting green structural changes in innovation. The accumulated stock of green patents increases the ratio of green patents in total patents granted, promoting structural change towards green innovation. The path dependence effect exists in both green inventions and green utility model patents.

Revisiting the relationship between ESG, institutional ownership, and corporate innovation: An efficiency perspective

Corp. Soc. Responsib. Environ. Manag., Aug'2024

Qiang Li, Minglai Li, Lin Zhang

This paper investigates how environmental, social, and governance (ESG) efficiency impacts corporate innovation, highlighting its role as a crucial indicator of resource utilization within firms. Analyzing data from A-share listed companies in China between 2009 and 2021, we find that ESG efficiency levels are positively correlated with corporate innovation outputs. This indicates that higher ESG efficiency contrib- utes to greater innovation. Our result also reveals that the relationship between ESG efficiency and corporate innovation is moderated by the firm's ownership structure. Specifically, the negative moderating effects of ownership are more pronounced in regions with lower economic development or stringent environmental regulations. Technology-based firms are particularly affected, exhibiting greater vulnerability to these negative effects. These findings confirm that ESG efficiency is a significant mechanism linking ESG practices to enhanced innovation capabilities.

Major government customer and corporate environmental responsibility: Evidence from China

J. Bus. Res., Oct'2024

Xiaojun Yu, Qiang Li, Lin Zhang

The study delves into a critical aspect of corporate governance: how firms can balance environmental responsibility with stakeholder interests. Analyzing 5,672 Chinese manufacturing firms, we find that having a government customer correlates with a 15% increase in corporate environmental responsibility scores. Specifically, a 10% rise in government purchase share boosts supplier responsibility by up to 6%. The supply chain's bargaining dynamics influence this link, especially in competitive sectors, smaller firms, and those with high trade credit. This underscores the role of visible business relationships in enhancing environmental commitments. Our findings imply that local governments, as major customers, can leverage their influence to spur suppliers towards greater environmental accountability.

Green bonds: Fueling green innovation or just a fad?

Energy Econ., Jul'2024

Hanmin Dong, Lin Zhang, Huanhuan Zheng

This study investigates the impact of green bond issuance on green innovation and its underlying mechanisms. We find that green bond issuance promotes green innovation, with stronger effects observed in regions with weaker climate regulation, industries exhibiting better environmental performance, and firms with more concentrated ownership. Further analysis reveals that corporate green bonds facilitate the reallocation of investment capital into research and development, effectively mitigating financial constraints on green innovation. This upsurge in green innovation not only enhances financial performance but also yields specific environmental benefits, such as improved environmental investment and ESG performance. These empirical results underscore the significance of green finance in fostering sustainable corporate innovation and advancing climate governance, rather than merely engaging in greenwashing practices.

How clean capital slows down disinvestment of carbon-intensive capital in the low-carbon transition

J. Econ. Dyn. Control, May'2024

Wei Jin, Frederik van der Ploeg, Lin Zhang

This paper explores a novel mechanism through which transitions to a low-carbon economy can proceed smoothly without excessive disinvestment in carbon-intensive capital. The mechanism is analyzed in a Lucas-Uzawa green growth model with carbon-temperature dynamics. Due to the externalities associated with climate damages and learning by doing, insufficient resources are allocated towards investment in clean capital in the business-as-usual market economy. Without green subsidies to stimulate clean capital investment, pricing emissions to internalize the social cost of carbon causes disinvestment in carbon-intensive capital and increases the costs of low-carbon transitions. Pricing emissions and subsidizing clean investment yield a higher return on clean capital and boost clean capital accumulation. This curbs disinvestment in carbon-intensive capital and limits carbon emissions. This highlights the positive role of clean capital for smoothing low-carbon transitions.

Working Papers

High Temperature, Power Rationing, and Firm Performance

Xinya Hao, Yongying Huang, Lin Zhang

This paper investigates the impacts of power rationing on firm performance during heat-induced power shortages and the economic rationales for the government's power rationing strategy in a system characterized by a lack of market mechanisms and price signals. We combine panel data from Chinese firms with fine-scale meteorological data to find robust evidence that high temperatures significantly reduce firms' electricity usage and performance. Leveraging interprovincial hydropower dispatching and precipitation anomalies, we provide causal evidence that the decline in firms' electricity usage is primarily driven by power rationing during high-temperature days. We further developed a framework to theoretically and quantitatively analyze the social planner's optimal allocation of electricity between sectors and the welfare implications of prioritizing the household sector's power demand. Our results provide insights that climate change-intensified inter-sectoral competition for electricity and market inefficiencies can explain power rationing in China.

Public and Private Provision of Clean Air: Evidence from Housing Prices and Air Quality in China

Lin Zhang, Huanhuan Zheng

This paper explores the dynamic interaction between housing prices and air quality in a growing economy with changing preferences using panel vector auto-regression. 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 air quality improvements.