The Effect of Emissions Trading System Policy on Co2 Emissions in China

Environmental pollution and global warming have already significantly damaged the natural ecological environment, and greenhouse gas emissions from human activities are the primary culprit of the phenomena from the 20th century. China gives the issue of climate change a lot of attention and actively uses carbon emissions trading to encourage emission reduction. This study investigates how China's carbon emission trading scheme has affected carbon emissions by constructing a heterogeneous timing DID model based on the data from 14 provinces in China from 2007-2019. The study finds that: the 1% significance level with a coefficient of -0.069 implies that the policy reduces carbon emissions by 6.9% on average. The role of the carbon market is significant, and the finding passes the robustness tests. There is spatial heterogeneity in the effects of policy implementation in different regions and provinces with different industrial scale; the government's emphasis on clean energy consumption is the mechanism of action of low ETS pilot policies to promote regional emission reduction. And our study finds that when the regional market degree is relatively backward, the effect of the ETS pilot policy on CO2 treatment is more obvious. And the effect of the ETS pilot policy on CO2 governance is more significant in provinces with a relatively low degree of market