Study on the Impact of Carbon Trading Market on Energy Efficiency

DOI: https://doi.org/10.62517/jbm.202509309

Author(s)

Zhipeng Yan*, Ganggang Yang, Longshan Wu

Affiliation(s)

School of Economics and Management, North University of China, Taiyuan, Shanxi, China *Corresponding Author

Abstract

This study uses panel data on China’s inter-provincial energy consumption structure from 2007 to 2022, employing a difference-in-differences (DID) model to systematically evaluate the impact and mechanisms of the carbon trading market on energy efficiency. The findings indicate that the carbon trading pilot program significantly enhanced energy efficiency in the pilot regions, with this effect being long-lasting. Parallel trend tests confirmed that the trends in energy efficiency changes were consistent between the treatment group and the control group before the implementation of the carbon trading market. Further placebo tests further validated the reliability of the causal relationship. By incorporating control variables such as industrial structure, labor input, and environmental regulations, the study revealed that optimizing the industrial structure and increasing labor input can significantly amplify the energy efficiency improvement effects of the carbon market. However, the impact of strengthened environmental regulations on short-term energy efficiency improvements was not significant. Further analysis showed that the carbon emission price is the core mechanism driving the improvement in energy efficiency, as it forces companies to accelerate technological upgrades and the transition to a low-carbon energy structure through cost transmission. The liquidity of the carbon market did not show statistically significant effects on energy efficiency. This study provides a theoretical basis for optimizing the mechanisms of the carbon trading market and formulating regional differentiated emission reduction strategies, confirming the effectiveness of carbon market in promoting energy efficiency improvements.

Keywords

Carbon Trading Market; Energy Efficiency; Double Difference Model (DID); Carbon Emission Price; Carbon Market Liquidity

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