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Based on the tightening regulation of carbon emissions, China has launched the pilot carbon emission trading scheme (CETS) since 2013. There is growing empirical evidence of the actual effect of CETS to promote enterprises' productivity which is characterized by total factor productivity (TFP). However, most studies ignored the further analysis of influence mechanisms. This paper aims to explore the impact of CETS on the TFP of enterprises and discuss the mediating role of government participation and carbon trading market efficiency. Using data from A-share listed enterprises from CETS-covered enterprises, this paper employed a combination of the propensity score matching (PSM) and difference-in-differences (DID) strategies and found that the CETS has a statistically significant positive impact on the TFP of enterprises, and the positive effect has been maintained for six years since its inception. The moderation analysis indicated that: (1) two dimensions of government participation in terms of the market incentive and government supervision significantly moderate the positive impact of CETS on TFP of enterprises; (2) two dimensions of carbon trading market efficiency in terms of the market scale and liquidity significantly moderates the positive impact of CETS on TFP of enterprises. In light of Chinese pilots CETS policy, the study highlights the important moderating roles of government participation and high carbon trading market efficiency on enterprise's TFP. [Display omitted] • Chinese pilots CETS significantly improved the TFP of enterprises by 9.48%. • The government participation moderates the positive impact of CETS on enterprises' TFP. • The higher carbon trading market efficiency is, the greater the moderating effect of CETS on TFP is. [ABSTRACT FROM AUTHOR]

As an important new tool for ecological poverty alleviation, carbon trading compensation is combining ecological protection with rural poverty alleviation. This paper evaluates the poverty alleviation impact of China's pilot carbon emissions trading schemes (ETS) at the provincial level before and after the program, which was implemented from 2007 to 2017. Specifically, we measure poverty alleviation in terms of rural residential income growth and rural job creation. By exploiting the quasi-experimental variation in whether provinces were affected by this pilot ETS policy, our analysis finds that the ETS policy resulted in increases in rural residential income and employment. We find the estimated effects correspond to an increase of approximately 752.6 yuan in annual rural residential income and 2.35% in the ratio of rural employed population to the total employed population, accounting for 9.5% of the rural residents' income and 7.11% of the rural employment, specifically. The results imply that the implementation of ETS is beneficial to income growth and job creation for rural areas of China, which mean the ETS policy may be conducive to poverty alleviation in affected provinces. • The effect of China's pilot carbon emissions trading schemes on poverty alleviation is tested. • Difference-in-Differences model is used. • The effect is an increase of approximately 752.6 yuan. [ABSTRACT FROM AUTHOR]