Carbon Emission Trading System, Digital Finance and Individual Health: Evidence from China

In the context of increasing concern about carbon neutrality, public health, and global sustainability, based on the micro-individual data of the China Family Panel Studies (CFPS) from 2010 to 2022, this paper adopts the staggered difference-in-differences (DID) model to analyze the impact of the carbon emission trading system (CETS) on individual health and the moderating role of digital finance. The results show that the CETS significantly improves individual health. Robustness tests, including propensity score matching, placebo analyses, addressing heterogeneous treatment effects, alternative specifications and samples, and excluding contemporaneous policies, confirm the validity of the results. Mechanism analysis shows that the development of digital finance, including the breadth of coverage, depth of use and degree of digitalization, can amplify the health promotion effect of the system, highlighting the key role of digital financial inclusion in the transmission of environmental policy dividends. Further analysis reveals that the moderating effect of digital finance exhibits significant heterogeneity: its enabling role in health dividends is more pronounced among females, individuals with lower education levels, and non-elderly populations. Spatially, this synergistic effect is more evident in the central and western regions, highlighting how digital inclusion helps overcome traditional socioeconomic and geographical barriers. The study concludes with policy implications emphasizing regionally tailored implementation, strengthening digital finance infrastructure, and maintaining long-term commitment to maximize the health, social welfare, and long-term sustainability benefits of carbon market policies.