Does Carbon Emissions Trading Improve Firm’s TFP

China is already the country with the largest carbon emissions in the world and is facing tremendous pressure to reduce carbon emissions.At the same time,China’s economic growth has gradually slowed down and entered a new normal.How to ensure high-quality economic growth on the basis of reducing carbon dioxide emissions has become a key issue for the government.Against this background,the National Development and Reform Commission issued a pilot policy on carbon emissions trading in 2011.Carbon emissions trading is an important national market-encouraged environmental policy.Can this policy achieve the expected reduction in emissions?It is of great significance to complete the peak of China’s carbon emissions in 2030.At the micro-enterprise level,the total factor productivity of an enterprise is an important indicator of corporate performance.The 19th National Congress of the CPC also pointed out that improving the total factor productivity of enterprises is the source of the driving force for promoting the high-quality development of our economy.Therefore,revealing the impact mechanism of the carbon emission trading pilot policy on the total factor productivity of enterprises at the micro-enterprise level provides micro-empirical evidence for China’s use of market-incentive environmental regulations to achieve carbon emission reduction and the formulation and improvement of carbon emission trading policies.This paper combines the theories of environmental economics and microeconomics,and first introduces the institutional background and current implementation status of the pilot policy on carbon emissions trading,selects provincial panel data from 2008-2017 and micro-enterprise panel data from 2008-2018.The difference model first examines the effect of the pilot policy on carbon emission reduction and economic growth at the macro level,and then explores the impact of the pilot policy on the total factor productivity of micro-enterprises and its transmission mechanism.Robustness test and heterogeneity analysis,and finally put forward corresponding policy recommendations based on the research conclusion.The main research conclusions of this article are as follows:After adding control variables and eliminating the effects of fixed effects,after the first,at the macro level,compared with non-pilot areas,the pilot policies can significantly reduce carbon dioxide emissions in pilot areas,increase the level of GDP and per capita GDP and achieve a double dividend of the environment and the economy.Second,at the micro level,compared with enterprises in non-pilot regions,the pilot policies can significantly increase the total factor productivity of enterprises in the pilot regions.Considering the problems such as endogeneity and sample selection error that may exist in the model,this paper conducts robustness tests using 8 methods,including parallel trend test,measurement method of replacing explained variables,control variable addition,placebo test,counterfactual test,policy interference elimination,instrumental variable method and PSM-DID test.The empirical results show that after excluding endogeneity,sample selection bias and other factors that may affect the empirical results,the carbon emission trading pilot policy can still significantly improve the total factor productivity of enterprises in the pilot areas.In addition,in consideration of regional differences in environmental tolerance and the interference of carbon emission transfer to the research conclusions,this paper also passed the relevant tests for elimination.Third,the heterogeneity test results show that the pilot policy has a more significant effect on improving the total factor productivity of enterprises in the western region than the enterprises in the central and eastern regions,and has a more significant effect on the total factor productivity of non-state-owned enterprises than state-owned enterprises.Companies in the industries that focus on are more obvious than those in non-focused industries.Moreover,the stronger the regional environmental law enforcement,the more significant the pilot policy will be in promoting the total factor productivity of enterprises.Fourth,the results of the transmission mechanism analysis show that the pilot policy can improve the total factor productivity of enterprises by promoting innovation and green technology innovation,and can also promote the level of total factor productivity of enterprises by optimizing the allocation of internal resource elements.Based on the research conclusions,this paper proposes the following four policy suggestions:①Change ideas,abandon the outdated concept of contradiction between environmental regulation and economic growth,and explore the use of market mechanisms to solve climate problems.②Strictly enforce the law,strengthen environmental law enforcement to ensure the effective implementation of environmental regulatory policies.③Adjust measures to local conditions,for different regions,different industries,and different attributes of enterprises,adopt specific environmental regulatory policies.④Strengthen innovation,encourage enterprises to solve the problem of pollution discharge costs through green R&D and endowment upgrade of factor structure.The possible marginal contributions of this paper are:(1)In the perspective of research,aiming at the micro-enterprise level research based on the lack of literature on carbon emissions trading pilot policies,this paper uses macro and micro data to match and comprehensively identify carbon emissions trading pilots Implementation effect and transmission mechanism of policies on micro-enterprise level.(2)In terms of research content,this study analyzes the "win-win" effect of the carbon emission trading pilot policy from two aspects:emission reduction effects and economic growth;selects two paths of technological innovation effect and factor allocation effect to analyze carbon emission trading Transmission mechanism.(3)In terms of research methods,this paper,with the help of the quasi-natural experiments in the field of environmental regulation overcomes the measurement errors and endogenous problems of regulatory indicators.Heterogeneity was analyzed from four aspects:different regions,the degree of corporate pollution,corporate attributes and environmental enforcement.The robustness and credibility of research were enhanced by excluding such as eliminating other policy interference,eliminating unobservable factors between regions,and avoiding differences between groups.