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.

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News

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E3M members selected for the Hong Kong Scholars Program

Mr. Xinya is a PhD candidate in E3M and also the CFO of PoWater. PoWater won first place in the North-East Asia division and third place in the Global Final of the ISETS-ESCAP Youth Voice Competition. Xinya was also selected as an ISETS Youth Committee member for drafting the ISETS Youth Declaration and delivered a speech at the 13th IFESD held in the UN-ESCAP Headquarters in Bangkok. [Dec. 2024]

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]

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

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E3M Pre Series 3: The impact of power outages on subjective well-being in rural China

Yao Tang from E3M will share her working paper about the relationship between power outages and subjective well-being.

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.

Publications

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Understanding the new quality productive forces in the energy sectorNew

J. Nexus., Dec'2024

Lin Zhang

The introduction of the term “new quality productive forces” (NQPF) in China signals its move towards cutting-edge technologies and innovation as the new drivers of economic growth. As it shifts from labor-tensive sectors towards advanced industries, the energy sector is also expected to experience significant regime switch. This paper discusses how the new term articulated by the top leadership will reshape China’s energy sector including its labor, technology, critical resource supply, and the industrial value chain. Overall, the energy sector is the key domain for creating NQPF for high-quality economic growth and the new forces act as a significant catalyst in transforming the energy sector towards achieving green, low-carbon, and sustainable development.

Integrating sentiment information for risk prediction: the case of crude oil futures market in China

Empir. Econ., Nov'2024

Zhe Jiang, Yunguo Lu, Lin Zhang

This paper incorporates investor sentiment indexes into the traditional standard heterogeneous autoregressive (HAR) model to improve its power on predicting crude oil futures risk. Using the 5-min high-frequency trading data to construct the daily realized volatility, the original and revised HAR models are used for in-sample regression and out-of-sample forecasting on a daily, weekly, and monthly basis. The results show that the sentiment indexes and the search trend contain incremental information for forecasting the realized volatility of INE crude oil futures in the short and medium term. The search volume is the best indicator for weekly risk forecasting of INE crude oil futures. No robust index can improve the performance of HAR-type model on long-term risk prediction. This paper thus highlights that market participants should select appropriate strategies to minimize risk when volatility is at stake for their decisions.

Environmental benefits of valorising food waste into bio-based polyols for the production of polyurethane rigid foams

Sustain. Prod. Consum., Nov'2024

Zi-Hao Qin, Anda Fridrihsone, Liang Dong, Jin-Hua Mou, Yahui Miao, Lin Zhang, Chunbao Xu, Mikelis Kirpluks, Carol Sze Ki Lin

In this work, we examined the environmental performance associated with the production of PURF using polyols derived from a FW biorefinery scheme by life cycle assessment (LCA). In general, FW-derived PURF leads to environmental benefits compared to fossil-based ones. Through the systematic examination of FW-derived polyols and PURF, this study demonstrated that FW-derived PURF could benefit the sustainable development of FW biorefineries and bio-based plastic industries, while the identified environmental hotspots need to be further studied and replaced with greener substitutes.

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

Corp. Soc. Responsib. Environ. Manag., Nov'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.

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.