Quantity or quality? The impacts of carbon emission trading system on green technology innovation: evidence from a quasi-natural experiment conducted in China

Utilizing China’s carbon emission trading system implemented in 2013 as a quasi-natural experiment, this study employs the difference-in-differences model based on Chinese city-level data from 2009 to 2019, and empirically investigates whether China’s carbon emission trading system can promote the quantity and quality of green technology innovation in cities. The results firstly suggest that China’s carbon emission trading system does have significant promoting impacts on the quantity and quality of green technology innovation in cities, and the promoting impacts show a time-lagged effect and a dynamic effect of first strengthening and then weakening. Secondly, the results of heterogeneity analyses indicate that China’s carbon emission trading system exerts more significant promoting impacts on the quantity and quality of green technology innovation in northern, non-resource-based, high‑ and low‑economic development level cities than southern, resource-based, medium economic development level cities. Finally, according to the results of the mechanism test, China’s carbon emission trading system improves the quantity and quality of green technology innovation in cities through the mediating effect of talent aggregation and innovation environment.