Abstract
Carbon peak and carbon neutralization as a global mission cannot be completed without systematically designed carbon mitigation regulations. In order to achieve the carbon emission reduction as formulated in the Paris Agreement and fulfill the promises made at the United Nations General Assembly, the Chinese government has promulgated various types of regulations to curb carbon emission with the hope of realizing the Porter effect. Selecting low-carbon pilot cities and carbon emission trading schema as the research objects, this study employs a differences-in-differences (DID) model to investigate the effects of carbon mitigation regulations on innovation quality and its heterogeneity. The empirical results reveal that market-based carbon mitigation regulations can significantly achieve the Porter effect and improve innovation quality. Furthermore, the government financial situation and the technical efficiency change have important moderating and mediating effects respectively. It is recommended that a full play of the market be given in China for the Porter effect. The main scientific value of this paper is distinguished the heterogenous effect of different types of environmental regulations, which can enhance the pertinence of environmental regulation.