Assessing the Mechanisms and Impacts of Emission Trading on China's Carbon Neutrality Goals: Evidence from Pilot Programs

초록

This study evaluates the emission reduction effects and regional heterogeneity of China's pilot Emissions Trading System (ETS) policy using panel data from 28 provinces between 2011 and 2020, applying the propensity score matching difference-in-differences methodology. The results show that the ETS policy significantly reduced carbon emissions in pilot regions, confirming its initial effectiveness. In addition, the heterogeneity analysis reveals that regions with a high regional gross domestic product (RGDP) and a high industrialization level (IL) achieved more significant emission reductions due to their abundant financial and technological resources as well as the advantages of industrial concentration. In contrast, regions with a low RGDP and a low IL exhibited limited policy effectiveness due to resource and technology constraints. Based on these findings, this study proposes the following policy recommendations. First, provide targeted support for regions with low economic and industrialization levels, such as reducing emission reduction costs through carbon finance tools and technology transfer. Second, optimize the allocation of carbon quotas, and enhance ETS market transparency to guide a high RGDP and to encourage highly industrialized regions to further explore their reduction potential. Third, promote regional collaboration in emissions reduction and capacity building, facilitate resource sharing and knowledge transfer, and establish a nationwide low-carbon development framework.

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