Green Finance and Health: How Does Implementing Carbon Emissions Trading Affect Mental Health?

Abstract

The issue of environmental pollution is hindering the well-being of Chinese citizens, posing a critical challenge to economic development. Existing studies on the impact of carbon emissions trading policies have largely overlooked their potential effects on the mental health and life satisfaction of residents. Therefore, this paper aims to broaden the existing research by investigating the influence of Chinas carbon emission trading policy on mental health using a nationwide longitudinal survey and employing the Difference-in-Differences (DID) model. Moreover, it examines the moderating effect of government in this relationship. The results show that (1)policies involving carbon emissions trading can improve residents quality of life and lessen depressive symptoms; (2)the effects are more pronounced for rural residents than for urban residents, and (3)performance evaluation of the government is important in moderating the relationship between carbon emissions trading and residents mental health.