Synergy or conflict? The joint effect of carbon and energy trading schemes on emission reduction in China

China has introduced multiple market-oriented policies to achieve its carbon peak and neutrality targets, notably the emission trading scheme (ETS) and energy consumption permit trading scheme (ECPTS), which partly overlap in coverage and mitigation mechanisms. While the individual effects of each policy on emission reduction have been well documented, their joint impact remains unclear. Here, using a difference-in-difference approach combined with propensity score matching, we assess the joint effects of ETS and ECPTS on carbon emissions and intensities based on a city-level emission inventory spanning from 2008 to 2020. We find that although both ETS and ECPTS independently contribute to emission reductions, their concurrent implementation does not yield a significant improvement over the no-policy baseline, suggesting policy crowding-out. Mechanism analysis indicates that this conflict stems from the policies’ mutual crowding-out effects on green technology innovation and energy efficiency improvements. Heterogeneity analysis indicates that policy conflict emerges mainly in third-tier, non-key environmental protection and low fiscal constraint cities, whereas synergy appears in second-tier, key, and high-constraint cities, resulting in significant reductions in carbon intensities. Our findings highlight the importance of establishing a coordinated framework to align carbon and energy trading systems, thereby maximizing their joint contribution to China’s emission mitigation goals.