The impact of carbon trading policy on embodied carbon emission in China's construction Industry:Evidence from a quasi-natural experiment

Embodied carbon emissions in China's construction industry have emerged as a pivotal route for achieving the country's carbon reduction targets. This study treats China's carbon trading pilot policy as a quasi-natural experiment, utilizing panel data from 30 provinces over the period 2006–2020. DID model is employed in the study to explore the specific impacts and mechanisms of the carbon trading policy on embodied carbon emissions within the construction industry. The findings as follows: (1) The carbon trading policy has a significant impact on the embodied carbon reduction of the construction industry within pilot regions. However, it exhibits a spatial spillover effect in non-pilot regions. (2) The embodied carbon emissions have notably decreased from the third year after the policy implementation. This indicates that the policy exhibits a delayed effect, and it takes time to accumulate to achieve this effect. (3) The policy has a significant emission reduction effect in municipalities, non-municipalities, and regions with larger economic scale, whereas its effect is insignificant in regions with smaller economic scale. (4) The policy influences the embodied carbon reduction in buildings by three primary pathways: optimizing energy structure, reducing energy intensity, and improving energy efficiency. Additionally, governmental intervention positively enhances the policy's effect, providing theoretical evidence for the government's macro-regulation in the carbon trading market.