The validity of carbon emission trading policies: Evidence from a quasi-natural experiment in China

This study focuses on the validity of carbon emission trading policies (CETP). CETP aims to adjusting the consumption structure of clean energy and promoting the transformation of green technology to achieve regional CO2 and SO2 reduction. Using difference-in-difference (DID) and spatial panel model, we estimated the abatement effect of CETP, the influence mechanism of regional CO2 and SO2 policies, environmental and economic compatibility with provincial panel data in China from 2005 to 2017. The results show that the CETP can effectively decrease regional CO2 and SO2 emissions in pilot areas by 19.1% and 37.0% respectively when considering spatial correlation of CO2 and SO2 emissions. From 2014 to 2017, the values of CO2 reduction effect are −0.139, −0.146, −0.187 and −0.206 respectively, indicating the abatement effect increases gradually. CETP can promote 6.1% of the ratio of clean energy consumption and 4.6% of the rate of green technology. In addition, further benefit analysis shows that CETP can improve 12.4% of regional economic output and residents' health by reducing regional CO2 and SO2 emissions, and effectively benefit high-quality economic growth.