## 4 Empirical Results
### Implications of the Empirical Results  
This study proves that China's ETS policy in the seven pilot provinces and cities has indeed achieved the \"Porter effect\" and discusses the heterogeneity of the development levels in different provinces and cities. Compared with the existing literature, there are two major contributions in this study. The first is the research method. To systematically evaluate the policy effect of China's ETS pilot projects, the PSM-DID method was combined with the DDD method, and a variety of matching methods and different placebo tests were adopted in the empirical analysis. This approach allowed the study to avoid the endogeneity problems existing in traditional measurement methods, thus improving the policy effect. Furthermore, it also allowed for further study of the common trend violation of the DID method, thus expanding the breadth of the policy effect. The second is the research field. Although there have been studies on the \"Porter effect\" of China's ETS pilot policy, there have been no definitive conclusions yet, and few publications that have discussed the policy effect of the economic development differences and industrial development differences of provinces and cities. On the basis of proving the existence of the \"Porter effect\" of the policy without the hysteresis effect and declining effect, we further prove that the policy has a stronger inhibitory effect on carbon emissions in the provinces and cities with higher levels of economic and service development, and it has a weaker inhibitory effect on the carbon emissions in the provinces and cities with higher levels of industrial and construction development. Regardless of the economic and industrial development differences, there is no significant impact on the economic effect of the policy. Previous studies that analyzed the impact of enterprise heterogeneity on the ETS policy showed that listed enterprises and state-owned enterprises had achieved better \"policy welfare.\" This study holds that provinces and cities with higher levels of economic and service development have also achieved stronger carbon reduction effects, and the development level of the service industry is the decisive factor for economic development. The results indicate that the policy is conducive to the development of entities with better qualities by comparing the enterprise, economic, and industrial aspects. Therefore, this study could provide an effective basis for China to build a national carbon market by considering the imbalance of the development in the different provinces and cities and providing a reasonable reference for the successful completion of the industrial transformation and connection with national policies. Furthermore, this work fills the research gap on the heterogeneity of the policy effects that are caused by the developmental differences of provinces and cities.  
Although this paper further studies the impact of heterogeneity on China's ETS pilot policy, it also has some deficiencies. First, the time dimension is not long enough, although it will not affect the basic conclusions. Future research should extend the time period of the data to eliminate the interference  
\begin{table}
\begin{tabular}{c c c c c c c c c c c c} \hline \hline  & **Inp** & **us** & **a** & **is** & **d** & **energs** & **environs** & **ns** & **ri** & **Ink** & **Inl** & **Ine** \\ \hline \(Z^{\text{st}}\)_econ & 0.137 \(\pm\) & 1.299 & 0.66\(\pm\  
caused by various factors in the initial stage of the policy's implementation and enhance the robustness of the empirical results. Second, there is a lack of comparative analysis. In the future, different methods can be adopted to analyze the relevant policy effects on the treatment of sulfur dioxide, carbonitride and other pollutants, as well as the policy effects of the ETS in the relevant countries and regions. This can establish a complete and systematic evaluation system and propose a series of more accurate and effective policy suggestions, which will be future research directions.