The Carbon Emission Reduction Effects of Market-Based Environmental Policies: A Study Based on Carbon Emissions Trading Policies

Carbon emissions trading market is an important institutional innovation to promote green and low-carbon transformation of economic development and sustainable economic and social development. With the quasi-natural experiment of China’s carbon emissions trading pilot policy since 2013, this paper constructs a multi-period double-difference model based on the panel data of 30 provinces and systematically evaluates the effectiveness as well as the heterogeneous performance of the carbon emissions trading policy on carbon emissions. The results show that the implementation of carbon emissions trading policy significantly reduces regional carbon emissions, with a significant impact coefficient of −0.1701 at the 1% level, and the finding passes a series of robustness tests. Heterogeneity analysis shows that the impact effect of carbon emissions trading policies is more significant in the eastern and central regions and more significant in regions with high levels of human capital. Mechanism analysis indicates that the carbon emissions trading policies achieve carbon emission reduction through the market mechanism and government intervention mechanism, and promote regional investment in scientific and technological innovation, reduce the total amount of energy consumption, and optimize the structure of energy consumption. Further analysis indicates that the carbon trading policy exerts a significant spatial spillover effect on carbon emission reduction.