## 1 Introduction
Most existing research is based on the mature experience of other countries and has not yet delved into the impact mechanism and behavioral evolution path of TGC and CET on the sustainable development of the electricity market. The effectiveness of guiding China's current situation is limited. In addition, the practical effects of TGC and CET are not simply a linear superposition but are influenced by various factors such as market supply and demand, policy design, and technological progress [29]. Current research mainly evaluates the combination effect of TGC and CET from an investment perspective without considering the dynamic impact of top-level design on the interaction between TGC and CET [18]. To better utilize TGC and CET in China and promote the sustainable development of the Chinese electricity market, it is of great academic and practical significance to conduct research based on the current situation and actual data of the Chinese electricity market and to deeply explore the optimal policy design for TGC and CET. To fill the research gap, this study analyzes the dynamic impact of TGC and CET on the sustainable development of China's electricity market from the policy design perspective. Extensive research and practice have proven that system dynamics (SD) methods have significant advantages in studying causal relationships and dynamic behavior in complex systems, especially for analyzing complex problems involving multiple variables and multi-path interactions [2, 30]. Therefore, based on SD analysis of the dynamic interaction between TGC and CET, this study establishes an impact system on the sustainable development of the electricity market under the influence of TGC and CET [31]. By simulating the impact of TGC and CET policy adjustments on the supply-and-demand relationship of the TGC market, CET market, and electricity market, as well as how supply-and-demand changes drive price fluctuations and affect the behavioral decisions of electricity market entities, this study systematically reveals how TGC and CET promote the sustainable development of the electricity market. The leading solutions and innovations of this study include (1) analyzing the complex interactive relationship between TGC and CET, identifying key factors that affect the sustainable development of the electricity market; (2) constructing an SD model for the sustainable development of the electricity market based on the influence of TGC and CET, and exploring how TGC and CET jointly affect the carbon reduction behavior of power enterprises through price signals and policy incentives; and (3) exploring the impact of different policy parameters on the sustainability of China's electricity market in a long-term dynamic process and providing a reference for government decision-making. The remainder of this paper is organized as follows: Section 2 analyzes the interaction between TGC and CET in China. Section 3 describes the research methods and introduces the SD modeling process. Section 4 simulates and analyzes the dynamic impact of different TGC and CET policy scenarios on the sustainable development of the electricity market. Section 5 discusses the research results. Finally, this study is summarized in Section 6.