Research on the synergistic effects of market-oriented environmental regulations on pollution and carbon emission reduction.

The reduction of greenhouse gases and atmospheric pollutants is a crucial aspect of environmental and climate governance. This paper utilizes pollution rights trading and carbon emissions trading policies as quasi-natural experiments to examine their effects. A difference-in-differences-in-differences (DDD) empirical model is used to analyze the data at the prefecture-level city level. The effectiveness of market-oriented environmental regulations in promoting synergistic reductions of pollutants and carbon emissions is assessed. The findings reveal that (1) carbon emissions trading and pollution rights trading policies significantly reduce emissions of carbon dioxide, sulfur dioxide, and particulate matter. The analysis confirms differentiated synergistic emission reduction effects between these two policy types. (2) Heterogeneity analysis reveals that the synergistic emission reduction effect of market-oriented environmental regulations is more pronounced in regions with environmental courts, in the eastern regions, and in the non-resource-endowed areas. (3) Mechanism analysis further reveals that the synergistic effect of the pollution rights trading policy is achieved through source control, process control, and end-of-pipe control measures. However, the synergistic effect of the carbon emissions trading policy is achieved through source control and process control. (4) Dynamic analysis indicates that the carbon emissions trading policy has shown significant synergistic effects since its early implementation. Conversely, the synergistic effects of the pollution rights trading policy have progressively enhanced with the application of the "end-of-pipe control" model. This study elucidates the effectiveness of synergistic governance through market-oriented environmental regulations in reducing both pollutant and carbon emissions. The findings provide valuable guidance for other emerging economies to reduce both greenhouse gas and air pollutant emissions.