Synergistic effects of a carbon emissions trading scheme on carbon emissions and air pollution: The case of China.

This article focuses on evaluating the synergistic effects of China’s carbon emissions trading scheme (CETS) on reducing both carbon dioxide (CO2) emissions and air pollution. Using panel data from 285 prefecture-level cities between 2005 and 2018 and employing a Difference-in-Differences (DID) model, the study finds that CETS implementation led to a reduction of approximately 9.8% in CO2 emissions, 11.7% in particulate matter (PM2.5), and 9.7% in sulfur dioxide (SO2) emissions, demonstrating significant co-benefits for climate and air quality. The analysis identifies reducing energy intensity and upgrading industrial structure as key mechanisms driving these synergistic effects, which are more pronounced in eastern regions, large cities, and cities at the final industrial development stage. These findings provide insights for policymakers aiming to enhance integrated environmental management and tailor carbon trading policies to regional and industrial contexts in China.