Coordination Effects and Driving Mechanisms of the Electricity and Carbon Markets: Evidence from China's Early Carbon Trading Pilot Regions

Abstract

: Under the goals of carbon peaking and carbon neutrality and the development of a new-type power system, electricity–carbon market coordination can reduce abatement costs and improve energy allocation. Using panel data from six early carbon-trading pilot regions in China from 2017 to 2022, this study evaluates the development and coordination of the electricity and carbon markets through the entropy weighting method, coupling coordination model, and geographical detector. The results show that both markets developed steadily and their coordination generally improved. Guangdong’s coordination degree rose markedly and reached 0.80 in 2021, while Hubei remained stable at about 0.60. The other regions were still in a state of basic imbalance. Government intervention remained the dominant driver, while the relative importance of human capital declined. All factor interactions exhibited enhancement effects, including bi-factor enhancement and nonlinear enhancement,