Research on the synergistic emission reduction effect of carbon emission trading and green financial policy

Based on the panel data of 496 firms from 2013 to 2020, this paper empirically tests the synergistic emission reduction effect and its action path of carbon emission trading mechanism and green financial tools. The study found that carbon emission trading mechanism, green credit tool, and green bond tool all significantly inhibited corporate carbon emissions. At the same time, the synergy between the carbon emission trading mechanism and the two green financial tools further effectively reduces the carbon emissions of enterprises. Green innovation plays an intermediary role between the synergistic effect on the carbon emission reduction of enterprises. That is, the carbon emission trading mechanism and green financial tools jointly promote green innovation to achieve carbon emission reduction. The impact of synergistic emission reduction mechanism on corporate carbon emissions is heterogeneous due to differences in corporate ownership, industry and region. Accordingly, we should pay attention to the synergistic emission reduction effect of carbon emission trading mechanism and green financial tools based on the mediating role of green innovation in improving the performance of corporate carbon emissions. •Carbon emissions trading, green credit, and green bonds curb corporate emissions notably.•Synergy between emissions trading and green financial tools enhances carbon reduction.•Carbon trading and green credit boost green innovation for emission cuts.•Impact varies by ownership, industry, and region due to heterogeneity.