A Comprehensive Evaluation of the Impact of China’s Carbon Market on Carbon Emission Efficiency from the Total-Factor Perspective

Excessive carbon emission presents a considerable danger to the sustainability of global development. The carbon market, a crucial mechanism to cut carbon emissions, is gaining more attention from the Chinese government. In this study, provincial-level total-factor carbon emission efficiency in China is assessed, and the influence of the national carbon market on this efficiency is examined. Through the introduction of the carbon market’s internal constraint mechanism, a novel perspective for analyzing the driving mechanism is constructed. Empirical findings indicate that the carbon market significantly improves total-factor carbon emission efficiency. Currently, the constraint mechanism acts as the primary driver of this improvement, while the role of the market-based mechanism remains underutilized. Mediation analysis suggests that the improvement is mainly achieved through adjustments in the energy structure; by contrast, neither technological innovation nor industrial restructuring exhibits a significant effect. The conclusions are crucial for a comprehensive understanding of China’s carbon market. Lastly, several recommendations are proposed.