Study on the Evaluation of Carbon Emission Trading's Effectiveness in Reducing Pollution and Carbon Emissions

Being the biggest developing nation in the world, China's huge energy consumption, widely distributed carbon emission problems, and complex and variable air pollution situation have always been topics that have attracted great attention from the academic community. The goal of this research is to fully examine whether China's recent implementation of carbon emissions trading has aided in the combined reduction of CO2 and PM2.5. The actual effects of carbon emissions trading policies in terms of environmental improvement and carbon emission reduction are examined by using the double-difference method and intermediary effect modeling. Panel data from 284 Chinese cities at the prefecture level from 2000 to 2019 are used, along with the seven carbon emissions trading pilot events that were fully launched in 2014 as a quasi-natural experiment. The analysis demonstrates that: (1) carbon emissions trading effectively realizes the joint reduction of CO2 and PM2.5; (2) the carbon trading policy has a more pronounced effect on reducing pollution and emissions in both the central and western regions, but does not lower carbon emissions in the eastern region, according to the results of the heterogeneity study; (3) The intermediary mechanism of carbon emissions trading to promote pollution reduction and carbon reduction is the significant mediating effect of energy consumption intensity on carbon dioxide and PM2.5.