Abstract: In order to evaluate the energy conservation and emission reduction effects of carbon emission trading policy in pilot areas in China, taking 287 cities at the prefecture level and above from 2007 to 2018 as the research sample, the urban energy and environmental efficiency was measured from the two dimensions of comprehensive energy environmental efficiency and pure energy environmental efficiency, and the quasi-natural experimental method of double difference was used to test the effect of carbon emission trading policy pilot on energy and environmental efficiency, and its impact mechanism was investigated. The results show that the carbon emission trading policy can effectively promote the improvement of energy and environmental efficiency in pilot cities and promote energy conservation and emission reduction in pilot cities. Further research shows that the promotion effect of carbon emission trading policy on urban energy conservation and emission reduction is affected by urban industrial structure, green innovation intensity and factor market development. In addition, carbon emission trading policies also have economies of scale and differences in industrial structure, and their effect on energy and environmental efficiency is more significant in cities with large populations and cities with old industrial bases. Therefore, the further promotion of carbon emission trading policy in China should focus on industrial structure optimization, green innovation guidance and factor market-oriented reform, and focus on large cities and old industrial base cities, so as to achieve the improvement of China’s overall energy and environmental efficiency.

Keywords: carbon emissions; carbon emissions trading policy; energy and environmental efficiency; Energy conservation and emission reduction; Green and low-carbon; DID