Abstract
Despite the extensive attention paid to emissions trading scheme (ETS) approaches, few studies have examined whether such ETS policies can lead to sustainable development in China. Drawing on the ideas of coupling and synergistic development, this study views sustainable development as the result of the interactions between the economy and the environment and constructs an index system to measure economic development and environmental quality. The system coupling model is used to reflect the synergistic interactions between the economy and the environment systems. The coordination degree model is then used to assess the economic-environmental coupling coordination degree in order to measure sustainable development. The empirical results show that the ETS can help in achieving economic-environmental sustainable development in the pilot cities. Moreover, the better the socioeconomic development of a city, the better effects of the ETS on sustainable development. However, it is more difficult to achieve economic-environmental coordinated development in industrially developed areas (e.g., Guangdong). These findings provide empirical evidence that the market-based ETS could alleviate the conflict between economic development and environmental pollution and could help in achieving sustainable development in emerging economies.