The Korean Journal of Economic Studies
An Analysis of the Impact of the Carbon Banking Program Using Error Correction Model with Focus on G
Heayoung Jung (Chonnam National University), Jeong Hwan Bae (Chonnam National University)Year 2015Vol. 63No. 4
As one of the CO2 emission reduction programs, the carbon bankingprogram is designed to encourage individual efforts to reduce CO2 emissions.In this program, consumers earn eco-points that can be used to buy othergoods and services if they reduce consumption on electricity, town gas, andsource water. We estimated household electricity demand for Gwangju andexamined if the carbon banking program affected significantly the householdelectricity demand. We found that monthly time series on electricity demand,electricity price, town gas price, population, and per capita gross regionalincome have cointegration relations. Thus we used fully modified errorcorrection model (FMOLS) to examine the effect of carbon banking programon the household electricity demand. We found that the carbon bankingprogram reduces significantly electricity demand.