The carbon trading policy is a product of the combination of government power and market power in order to achieve my country's "carbon peak" and "carbon neutrality" as an important emission reduction tool for our party in combination with my country's actual situation. Based on the spatial Tobin double difference and other methods, this paper analyzes the emission reduction effect with the data since the implementation of my country's carbon trading policy from 2003 to 2019 and analyzes its transmission mechanism. The study found that the carbon trading policy can significantly reduce the carbon emission intensity of the pilot area, and the operation status of the carbon market can also significantly reduce the carbon emission intensity of the pilot area. The government can adjust the operation status of the carbon market to improve the regional emission reduction effect. The spatial interaction term also shows that the carbon trading policy has a positive spillover effect on the surrounding areas. The mediation effect analysis shows that the carbon trading policy mainly promotes the reduction of regional carbon emission intensity through technological innovation and industrial structure optimization. In the heterogeneity analysis, carbon trading policies have different effects on the eastern, central and western regions, so carbon trading policies should be implemented according to local conditions.
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