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In the light of China's synergistic need to achieve Sustainable Development Goals (SDG) 10 and 13, it is necessary to consider the potential nexus between common prosperity and carbon reduction. Therefore, this work proposes a new comprehensive measure to assess the degree of common prosperity in 30 Chinese provinces from 2006 to 2019. Furthermore, we examine the impact of common prosperity on carbon emissions applying the system-generalized method of moments (SYS-GMM) approach. All major conclusions are as follows: (1) the level of common prosperity has continued to increase between 2006 and 2019; (2) common prosperity and carbon reduction are compatible with each other, i.e., common prosperity significantly reduces carbon emissions; (3) common prosperity reduces carbon emissions indirectly by improving labor productivity and upgrading industrial structure; (4) carbon emissions are indirectly increased by common prosperity through the expansion of gross fixed capital formation and higher levels of urbanization, and (5) in provinces with higher levels of common prosperity and lower levels of carbon emissions, common prosperity has a considerably greater influence on carbon emissions. Finally, we suggest several policy implications for promoting China's sustainable development. [ABSTRACT FROM AUTHOR]

While the Paris Agreement and 2030 Agenda for Sustainable Development are the two most important global governance agendas, in practice they have been implemented in isolation. This calls for the need to focus on the potential policy synergies between emission reduction policies and Sustainable Development Goals (SDGs). This paper therefore aims to explore whether the emissions trading scheme (ETS) policy—one of the most effective ways to fulfill the target determined by the Paris Agreement, would facilitate reducing income inequality (SDG10). By combining a difference-in-difference estimation and propensity score matching technique based on a balanced panel dataset for 31 Chinese provinces from 2010 to 2018, we quantify the impact of ETS policy on income inequality between urban and rural areas in China. The results demonstrate that compared with the regions without ETS, the Theil index between rural and urban areas with ETS decreased by 0.018 on average in China. In addition, the ETS would perform better in regions with low urbanization level and high coal dependence. Hence it is vital to speed up the establishment of a unified ETS market in China. This is particularly true for inner underdeveloped regions in China. These findings proven to be robust according to a series of tests challenge the view that SDG 10 has the least relevance to climate action and suggest rethinking the effectiveness and applicability of ETS. Therefore, our research can not only serve as a reference for the development of ETS in China and elsewhere, but also inform decision makers who are seeking for policy synergies between the Paris Agreement and SDGs. [Display omitted] • We quantify for the first time the impact of ETS on urban-rural income inequality. • We make joint use of DID model and PSM technique with data for 31 Chinese provinces. • Overall the ETS exerts a mitigation effect of 0.009 on urban-rural income inequality. • The ETS performs better in low urbanization level and high coal-dependent pilots. • The ETS generates policy synergies between the Paris Agreement and SDG 10. [ABSTRACT FROM AUTHOR]