The study investigates the effect of electricity market reform on regional carbon emissions and its underlying mechanism, employing a difference-in-differences (DID) model. Specifically, the construction of electricity spot markets is treated as a quasi-natural experiment, and panel data from 282 inland municipalities in China spanning 2012-2021 serve as the study's sample. The results of the study show that the electricity spot market can significantly reduce regional carbon emissions. After a series of robustness tests, such as the placebo test and the PSM-DID test, the conclusion still holds. Further analyses show that the mechanism by which the construction of the electricity spot market can have an impact on regional carbon emissions is that it has an economic agglomeration effect and a green innovation effect. Heterogeneity suggests that electricity spot market construction has the greatest impact on the intensity of direct carbon emissions in cities. In regions where the government's lowcarbon governance is stronger, electricity spot market construction has the greatest impact on the intensity of urban direct carbon emissions.