Research Article
Research on the Impact of Carbon Emission Trading Policy on Carbon Emissions: An Empirical Examination Based on 284 Prefecture-level Cities in China
Issue:
Volume 14, Issue 1, February 2026
Pages:
1-17
Received:
8 December 2025
Accepted:
29 December 2025
Published:
20 January 2026
DOI:
10.11648/j.ijepp.20261401.11
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Abstract: This study leverages the implementation of China's pilot Emissions Trading Scheme (ETS) policies as a quasi-natural experiment. Utilizing panel data from 284 prefecture-level and above cities in China spanning 2003 to 2017, we employ a multi-period difference-in-differences (DID) approach to empirically investigate the carbon reduction effects, underlying mechanisms, and heterogeneity associated with the ETS pilots. The findings reveal that: (1) The ETS effectively reduces both the total carbon emissions and carbon intensity in the pilot regions through dual channels of aggregate control and efficiency improvement. This conclusion remains robust after a series of rigorous tests. (2) The ETS achieves carbon reduction in pilot cities through the combined action of market mechanisms and administrative interventions. While the role of market mechanisms is relatively limited, administrative interventions contribute significantly. (3) The carbon reduction effects of the ETS exhibit significant heterogeneity. From the perspective of urban resource endowment, non-resource-based cities outperform resource-based cities in carbon reduction effectiveness. Regarding allowance allocation methods, regions employing a hybrid approach combining free allocation with auction and fixed-price sales demonstrate superior carbon reduction outcomes compared to those using solely free allocation or a combination of free allocation and auction. In terms of carbon price, the ETS policy demonstrates greater effectiveness in reducing total carbon emissions in high-carbon-price regions than in low- and medium-carbon-price regions, but its effectiveness in reducing carbon intensity is weaker in high-price regions compared to low- and medium-price regions. This study provides empirical evidence and policy insights for China to tailor the implementation of its ETS to local conditions, thereby advancing the achievement of its "dual carbon" goals (carbon peaking and carbon neutrality) and fostering green transition development.
Abstract: This study leverages the implementation of China's pilot Emissions Trading Scheme (ETS) policies as a quasi-natural experiment. Utilizing panel data from 284 prefecture-level and above cities in China spanning 2003 to 2017, we employ a multi-period difference-in-differences (DID) approach to empirically investigate the carbon reduction effects, und...
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,
Yuxiao Lei
