The Pollution Reduction and Carbon Mitigation Effects and Mechanisms of Carbon Trading Policies --An Analysis Based on the Pearl River-Xijiang Economic Belt

Abstract As China's economy and society continue to develop and industrialization progresses,the nation faces significant challenges,including air pollution and global warming.The carbon trading policy,acknowledged as a pivotal tool in achieving the "double-carbon" goal,has garnered considerable attention.This study utilizes panel data from the Pearl River-Xijiang Economic Belt spanning from 2008 to 2021. Employing Synthetic Control Model (SCM) and Space Difference-in-Differences (S-DID),it examines the impact of carbon trading policies on carbon emissions and environmental pollution, as well as potential spatial spillover effects and underlying mechanisms.The findings indicate that the introduction of the carbon trading policy, along with control variables,resulted in a 35.20% reduction in pollution and carbon emissions.Furthermore,the policy not only reduces pollution and carbon emissions within pilot areas but also triggers a 30.8% reduction in pollution levels across the economic belt through spatial spillover effects.However,the synergistic impact shows regional disparities;for instance,Guangzhou-Foshan experiences a 46.8% reduction, while Liuzhou exhibits a non-significant negative coefficient.Other cities demonstrate significant negative effects at a 5% level.Analysis of the mechanisms reveals that the carbon trading policy stimulates reductions in pollution and carbon emissions through two primary pathways:enhancing energy utilization efficiency and fostering technological innovation.Although the coefficient between advanced industrial structure and pollution reduction is negative,it lacks significance.