Has the energy-consuming right trading system achieved win-win development for China's environment and economy?

The energy-consuming right trading system is a market-oriented environmental regulation policy based on source control in China, the implementation of which aims to help the realization of the goal of controlling total energy consumption and energy intensity and to promote green development. Based on the panel data of prefecture-level cities from 2012 to 2019, this article theoretically analyzed the mechanism of the action of the energy-consuming right trading system; applied the multi-period PSM-DID method to empirically test whether the energy-consuming right trading system had achieved win-win development for both the environment and the economy; and tested the robustness of the findings by replacing variable settings, adding control variables, and applying placebo tests. In addition, the short-term and long-term impact paths of the environmental and economic effects of the energy-consuming right trading system are theoretically analyzed and empirically tested respectively. The findings were as follows: (1) The implementation of the energy-consuming right trading system effectively reduced the total emission and emission intensity of energy pollutants and realized positive benefit for the environment. Besides, the reduction in emission intensity was more significant. (2) The energy-consuming right trading system not only increased the quantity of economic development, but also pulled up the economic growth rate, thus realizing a positive benefit to the economy. (3) The results of the dynamic effect analysis showed that the energy-consuming right trading system did not have a persistent effect on the total amount and intensity of pollution emissions. But it had a more significant and persistent effect on the rate and level of economic development. (4) Since the energy-consuming right trading system was in the early pilot stage, it mainly achieved environmental and economic dividends through the short-term path of improving energy efficiency and not the long-term path of industrial structure upgrading or energy structure adjustment. Based on this, we should further build and improve the energy-consuming right trading market and improve the design of the system to ensure standardization, convenience, and transparency during the operation and enhance the degree of marketization. It is also of great importance to accelerate the development of new energy, new technologies, and new industries to promote green transformation and decarbonization in the energy industry. Furthermore, we should build a comprehensive and coordinated environmental policy system by promoting the coordinated implementation of the energy-consuming right trading system with other environmental regulation policies based on emission control, realizing the benefits of ' 1 + 1 >2.' [ABSTRACT FROM AUTHOR]