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April 12, 2026Frontiers in Environmental ScienceOpen Access

Market-based instruments, technological innovation, and enterprise air pollution: evidence from China’s carbon emissions trading system

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Authors

MJMengxue JiMSMingsong SunSDShuxin Deng

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Overview

Examines the effect of China's carbon emissions trading system on air pollutant emissions, suggesting significant reductions.

Key Points

  • This study aims to assess the impact of China's carbon emissions trading system on reducing air pollutant emissions from firms.
  • Constructed a firm-level panel using data from the China Industrial Enterprise Database and the Pollution Database (1998–2014).
  • Linked firm data to city-level implementation of the carbon emissions trading system (CETS).
  • Employed a staggered difference-in-differences design with robustness checks, including PSM-DID and placebo tests.
  • CETS significantly reduces firms' air pollutant emissions by an average of 11.02%.
  • Notable reductions were observed for sulfur dioxide (−17.93%), nitrogen oxides (−10.18%), and dust (−11.2%).
  • The reduction effect is primarily driven by technological innovation and is stronger among larger firms and those in eastern regions.

Cite This Study

Ji et al. (2026) studied this question.

synapsesocial.com/papers/69db35be4fe01fead37c4397https://doi.org/10.3389/fenvs.2026.1760666
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  1. 1Effects of Carbon Trading Pilot on Carbon Emission Reduction: Evidence from China’s 283 Prefecture-Level Cities2022 · 17 citations