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Prior studies focus mainly on the influence of ETS on energy consumption, carbon emissions, and the economy; however, the effects on energy consumption and output structure still need to be discovered. This study employs a time-varying difference-in-differences approach to test whether China's ETS significantly affects energy structure represented by coal, oil, and natural gas consumption and renewable energy output. The results show that the ETS policy significantly reduced China's coal and oil consumption and increased natural gas consumption and renewable energy output. Besides, the influence of ETS on energy structure becomes increasingly significant over time. The results demonstrate that energy investment mediates the effects of ETS on energy consumption and output structure, and industrial structure mediates the effects on coal and fossil consumption. In addition, as economic development increases, the negative effects of ETS on coal and oil consumption decrease, the positive effect of ETS on natural gas consumption increases, and the positive effect of ETS on renewable energy output decreases. As the share of the secondary sectors increases, the negative effect of ETS on coal and oil consumption decreases, the positive effect of ETS on natural gas consumption decreases, and the contribution of ETS to renewable energy output increases. [ABSTRACT FROM AUTHOR]

As the main climate policy, emissions trading scheme (ETS) has been proved by scholars to have significant impacts on carbon dioxide (CO 2) emissions and energy consumption reduction worldwide. However, existing studies have focused mainly on the simulated impacts of ETS and few studies have poured specific attention into the actual impacts and their dynamical change, which may lead to an ambiguous understanding of ETS's performance. Here, taking China as the case study, this study investigated the net dynamic impacts of ETS policy on low-carbon development with respect to CO 2 emissions, carbon intensity, energy consumption and energy intensity using a difference-in-differences method. The findings indicate that there is a positive relationship to some extent between carbon trading system and low-carbon transformation. The effect of ETS policy on low-carbon development will gradually increase over the time. When the variables population, gross domestic product, ratio of the secondary industry, technical level, and income level are controlled, these conclusions are also robust. In addition, common trend hypothesis and counterfactual test were used to confirm the reliability of the conducted difference-in-differences models. The findings are conductive to the future ETS policy-making and the research framework proposed in this study is also applicable to the assessment of global climate policy. • This study explores the low-carbon impacts of emissions trading scheme. • Difference-in-differences model are conducted base on emissions trading scheme. • Emissions trading scheme significantly negatively impacts low-carbon development. • All the difference-in-differences models pass the robustness test. • The findings provide experience reference for the further promotion of ETS policy. [ABSTRACT FROM AUTHOR]