The Impact and Influencing Path of the Pilot Carbon Emission Trading market——Evidence From China

Abstract

As the country with the largest CO 2 emissions in the world, the Chinese government has put forward clear goals of hitting peak carbon emissions by 2030 and carbon neutralization by 2060. Thus, China started piloting carbon emission trading in 2013, and in July 2021 China opened national carbon trading, which is the largest carbon market in the world ( China Launches World, 2021 ). Therefore, it is very important for China to study the role and mechanism of carbon trading at present. Based on the quasi-natural experiment of China’s carbon market pilot, this paper uses panel data of 30 provinces in mainland China from 2008 to 2019 to conduct an empirical study on carbon emission reduction and the economic effects in China’s pilot provinces through a Time-varying Differences-in-Differences method model. The results show that the implementation of a carbon trading policy can significantly inhibit carbon emissions and promote economic growth. At the same time, this paper further analyzes the emission reduction mechanism of the carbon emissions trading policy through the intermediary effect test and finds that the policy mainly realizes carbon emission reduction by changing the energy consumption structure, promoting low-carbon innovation, and upgrading the industrial structure. In addition, innovative research has found the impact of a carbon price signal and marketization on the emission reduction effect of the carbon market. Finally, targeted suggestions are put forward.