Does the EU emissions trading system help reduce PM_2.5 damage? A research based on PSM-DID method.

Area of Science:

• Environmental Science
• Economics
• Public Policy

Background:

• Air quality, particularly haze pollution, poses significant threats to sustainable development and human health.
• Existing research on emissions trading systems (ETS) primarily addresses carbon reduction, neglecting synergistic effects on particulate matter (PM2.5).

Purpose of the Study:

• To investigate the spillover effects of the European Union Emissions Trading System (EU ETS) on PM2.5 damage reduction.
• To analyze the impact mechanisms underlying the relationship between the EU ETS and PM2.5 reduction.

Main Methods:

• Utilized the PSM-DID (Propensity Score Matching-Difference in Differences) method for empirical analysis.
• Employed data from the World Development Index (WDI) database.

Main Results:

• The EU ETS demonstrates a significant positive impact on reducing PM2.5 damage.
• The effectiveness of the EU ETS in mitigating PM2.5 damage exhibits dynamic effects across different implementation phases.
• Robustness tests confirm the reliability of the findings.

Conclusions:

• The EU ETS contributes to synergistic governance, achieving both carbon emission reduction and PM2.5 damage mitigation.
• Policy recommendations are provided to encourage dual environmental benefits, fostering economic growth and environmental improvement.