Analysis of the Impact Mechanism of Carbon Emission Trading Policy on Carbon Emissions and Measurement of Operational Efficiency in Pilot Markets

Based on data from 30 provinces in China from 2010 to 2021, this study employs the super-efficiency SBM model to assess the operational efficiency of pilot carbon trading markets and the carbon reduction efficiency across provinces. A multiple time points DID approach evaluates the effectiveness of the carbon trading pilot policy on carbon reduction efficiency and emissions. Additionally, a mediation model is utilized to explore the mechanisms through which carbon trading policies influence carbon reduction efficiency and emissions. The results indicate that: (1) there are disparities in the operational efficiency of pilot carbon trading markets, with Beijing, Guangdong, and Shenzhen demonstrating high efficiency, followed by Shanghai and Tianjin, while Hubei and Chongqing exhibit the lowest; (2) compared to the control group, the carbon trading pilot policy significantly improves carbon reduction efficiency in the experimental group by 11.3% and reduces carbon emissions by 3%; (3) the carbon trading policy enhances carbon reduction efficiency and achieves emissions reductions through upgrading industrial structures, increasing foreign direct investment, and improving levels of openness; (4) regional heterogeneity exists in the carbon trading policy's effects, showing an imbalance with western regions > central regions > eastern regions. The study reveals that carbon trading policies significantly contribute to achieving emissions reductions, but further improvements in carbon trading markets and enhancements in green innovation are necessary to advance carbon neutrality goals. JEL classification numbers: P28. Keywords: Carbon Trading Policy, Super-efficiency SBM, Carbon Trading Market, Multiple Time Points DID, Mediation Effect.