Comparison of industrial structure optimization paths under environmental regulation: efficiency improvement or structure improvement?

Ruoshan Fan and Sanxin Su

International Review of Economics & Finance, 2025, vol. 102, issue C

Abstract: Carbon emission trading system, as a market-motivated environmental regulation tool, is an inevitable choice for China to seek ecological environment governance and high-quality development and sustainable development. Taking the carbon emission trading pilot policy implemented in China as a quasi-natural experiment event, this paper uses the DID method to study the effect of carbon emission trading system on the evolution of industrial structure by selecting the panel data of 28 provinces and cities in China from 2006 to 2020. The results show that the carbon emission trading system can effectively promote the tertiary industry to expand the proportion of national economic GDP and promote the evolution of industrial structure to the direction of optimisation. The mechanism test shows that the carbon emission trading system can optimize the industrial structure through the improvement of energy efficiency and the optimisation of energy structure. The policy impact is different for regions with different levels of economic development. According to the research results, the government can implement regionally differentiated carbon emission trading policies, increase the investment in human capital and R&D innovation in related aspects, promote the improvement of energy efficiency and energy structure, and help the carbon emission trading system to further optimize the industrial structure through the above measures.

Keywords: Carbon emission trading system; Optimisation of industrial structure; Energy efficiency; Transformation of energy structure (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025004605

DOI: 10.1016/j.iref.2025.104297

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