Does carbon emission trading policy has emission reduction effect?-An empirical study based on quasi-natural experiment method.

As an important measure to reduce carbon emissions, carbon emission trading policy has been widely concerned and implemented around the world. The emission reduction effect of carbon emission trading policy has become a hot topic in theoretical researches and empirical explorations. Hence, this study aims to discuss the impact of the implementation of carbon emission trading policy on the reduction of carbon emissions, as well as the potential influencing paths and mechanisms. The quasi-nature experimental design is conducted with the data of 272 prefecture-level cities in China from 2007 to 2019. The propensity score matching (PSM) and difference-in-difference (DID) methods are adopted to explore and verify the causal relationship between carbon emission trading policy and carbon emissions. The results of this study are as follows: (1) the implementation of carbon emission policy can promote the reduction of carbon emission significantly; (2) the heterogeneity analysis results denote that the effect of carbon emission policy on the reduction of carbon emission varies among cities of different geographical locations; (3) mechanism analysis results indicate that technological capability is the main channel for carbon emission policy promotes the reduction of carbon emission; however, the effect of industry structure upgrading mechanisms is not significant. This manuscript responds to the theoretical issues of carbon emission and provides an empirical basis and references for further promoting the implementation of carbon emission policy.