Spatial emission reduction effects of China’s carbon emissions trading: quasi-natural experiments and policy spillovers

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Insufficient assessment of emission reduction effects still exists in the carbon emission rights trading system, a major environmental regulation measure in China. Based on the data from the carbon trading pilot covering the years from 2007 to 2017, this study combined the synthetic control method with dynamic spatial Durbin model to comprehensively evaluate the spatial emission reduction effects of carbon trading policies. The results showed that: ① The carbon trading policies promoted carbon emission reductions in the pilot regions, among which Tianjin and Hubei responded significantly, and also helped to suppress carbon emissions in the neighboring areas. ② Long-term emission reduction effect from carbon emissions trading became gradually significant, while the indirect emission reduction effect was relatively weaker. ③ In term of reducing carbon emissions, the economic development channel played a key role, but it had a threat to the promotion of carbon emissions in the surrounding areas. Energy consumption was the main obstacle to the growth of carbon emissions. ④ In the long run, technological progress tended to become the key to the effective implementation of potential emission reduction effects of carbon trading policies. Based on the above findings, we suggest that the construction of a national carbon trading market should be promoted, the balanced development and orderly advancement of regional carbon trading markets should be paid attention to, the coordinated development of green economy as well as knowledge and technology exchange and cooperation among regions should be strengthened to form a low carbon development model among regions.