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Will carbon emission trading policy improve the synergistic reduction efficiency of pollution and carbon? Evidence from 216 Chinese cities

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  • Tingting Bai
  • Yong Qi
  • Zihao Li
  • Dong Xu

Abstract

Based on the panel data of 216 Chinese cities from 2008 to 2018, the synergistic reduction efficiency of pollution and carbon (SREPC) was calculated using the super‐efficiency slack‐based measure model. Differences‐in‐differences (DID), propensity score matching (PSM)–DID, and spatial‐DID were adopted to study the impact of the carbon emission trading (CET) policy on SREPC. The study results show that SREPC was not improved overall, with an unbalanced development characteristic of high efficiency in the east and low efficiency in the west. The Meta‐frontier results show that there were indeed significant differences between pilot and non‐pilot cities before and after the implementation of the CET policy. Mechanism tests reveal that CET promoted SREPC by improving energy efficiency and optimizing industrial structures. Spatial analysis shows that CET had spatial spillover effects and decreased SREPC in neighboring cities. These reduction effects occurred in neighboring non‐pilot cities and showed an inverted U‐shaped relationship with increasing geographical distance, particularly significant within 500–600 km. Inverse data envelopment analysis shows that CET can utilize the synergistic reduction potential of pollution and carbon.

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  • Tingting Bai & Yong Qi & Zihao Li & Dong Xu, 2025. "Will carbon emission trading policy improve the synergistic reduction efficiency of pollution and carbon? Evidence from 216 Chinese cities," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(4), pages 2120-2143, June.
    • Handle: RePEc:wly:mgtdec:v:46:y:2025:i:4:p:2120-2143
    DOI: 10.1002/mde.4014
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