The Impact of Carbon Emissions Trading Pilot Policy on Industrial Structure Upgrading

Using the carbon emissions trading pilot policy implemented since 2011 as a quasi-natural experiment, this paper constructs a multi-period DID model based on panel data of 280 prefecture-level cities from 2006-2019 to explore the impact of the carbon emissions trading pilot policy on industrial structure upgrading and conducts a heterogeneity test and mechanism test. This study finds that the carbon emissions trading pilot policy significantly promotes the upgrading of industrial structures, especially for larger cities and non-resource-based cities. Further exploration of the impact mechanism shows that the carbon emissions trading pilot policy promotes industrial structure upgrading mainly through green innovation. The findings of the study have significant implications for the construction of a high-quality, modernized economic system in China.