Can Emission Trading Scheme Improve Carbon Emission Performance? Evidence From China

This paper explores the effect of China’s emission trading scheme (ETS) pilot policy implemented during 2013-2014 on carbon performance. Adopting Difference-in-Difference (DID) model, we find that: 1) ETS can significantly improve performance listed companies in provinces. 2) The heterogeneity analysis shows that eastern coastal areas has improved significantly, which is not significant central and western areas. 3) We innovation capabilities companies, suggesting a channel for impact Overall, our study played governance role China further highlight some important implications with respect to helping save energy reduce emissions, promoting improvement policy.