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ORIGINAL RESEARCH
Does the Carbon Emission Trading Scheme
Truly Enhance Green Innovation Efficiency?
From the Perspective of Market Mechanism
and Government Intervention
1
School of Economic and Management, Anhui University of Science and Technology, Huainan, 232001, China
2
Mining Enterprise Safety Management of Humanities and Social Science Key Research Base in Anhui Province,
Huainan, 232001, China
3
School of Finance and Mathematics, Huainan Normal University, 232038, China
Submission date: 2024-03-21
Final revision date: 2024-07-04
Acceptance date: 2024-08-23
Online publication date: 2024-10-28
Publication date: 2025-11-14
Corresponding author
Pol. J. Environ. Stud. 2025;34(6):8435-8452
KEYWORDS
green innovation efficiencycarbon emissions trading schememarket mechanismgovernment interventionthreshold effect
TOPICS
ABSTRACT
Carbon emission trading emerges as a pivotal instrument in propelling China’s commitment to
green development. With the nation’s carbon market in its formative years and its mechanisms yet
to fully mature, unraveling its influence on green innovation efficiency becomes increasingly vital.
This study utilizes the SBM-DEA model to evaluate green innovation efficiency across 30 provinces
from 2005 to 2020, uncovering the following notable findings: (1) Carbon emission trading schemes
significantly enhance green innovation efficiency in China, a finding that remains robust under various
checks. (2) In the context of China’s emerging carbon market, government intervention, rather than
market mechanisms, plays the most crucial role in enhancing green innovation efficiency. (3) A threshold
regression analysis discloses a dual-threshold effect of government intervention on the relationship
between market mechanisms and green innovation efficiency. (4) The impact of policies varies across
different geographical areas, cost pass-through capabilities, and levels of energy consumption. These
findings provide new insights into refining strategies for carbon market development and improving
green innovation efficiency, offering a fresh perspective on navigating the complexities of environmental
policy and economic growth.
CONFLICT OF INTEREST
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
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