Abstract: Based on the panel data of 30 provinces from 2008 to 2018, and taking the carbon emission trading pilot policy as the natural experiment, the effect of “reducing carbon and increasing performance” was studied by constructing a fixed-effect difference-in-differences model. The study found that the carbon emission trading policy had achieved both environmental benefits and economic benefits, that was, it had played a significant “reducing carbon and increasing performance” effect, and it was still stable after dynamic effect tests and placebo tests. Further, the heterogeneity analysis found that the policy effect of carbon emission trading was more obvious in the heavy industry area. The mechanism test confirmed that carbon emission trading mainly achieved “reducing carbon” by adjusting the energy consumption structure, and “increasing performance” by promoting R&D innovation, to promote the transformation of China’s low-carbon economy. The research conclusions further enriched the research on the effect of carbon emission trading policies, and had practical significance for the transformation of China’s low-carbon economy and the realization of the “dual carbon” goal.

Key words: carbon emissions trading, low-carbon economy transformation, difference-in-differences model, energy consumption, R&D innovation;