Carbon emissions trading, industrial structure upgrading and green development: Excess benefits of combined actions

Clarifying the influence mechanisms of carbon emissions trading scheme (ETS), industrial structure upgrading (ISU), and green development is of great theoretical and practical significance. Existing studies have only focused on the role of ETS or ISU on green development and have not included them in an analytical framework. The DID model and the moderating effect model are therefore combined in this work to to explore how the ETS will affect the link between ISU and green development throughout the period of 2008 to 2019 using panel data from 271 Chinese cities. Through a series of robustness and endogeneity tests, we find that: (1) ETS can significantly moderate the U-shaped relationship between ISU and green development, and this impact is significant in both the long and short term; (2) When ETS and ISU are implemented at the same time, the effect of the combined actions is greater than the sum of the effects of the two policies implemented separately, which means that the combined actions has excess dividends; (3) ETS and ISU have significant direct effects and spatial spillover effects on green development, and the excess dividends of combined actions also exist significantly at the spatial level. The research results of this paper provide an important theoretical and empirical basis for establishing the combined actions of ETS and ISU.