Boosting green technology innovation in China's construction industry: The power of energy-consuming rights trading policy

Despite the energy-consuming rights trading (ECRT) as a policy practice to achieve the Sustainable Development Goals (SDGs), the existing literature has not yet clearly revealed how it affects green technology innovation in the construction industry. Based on the panel data of 30 provincial-level administrative regions in China from 2010 to 2021, this paper empirically examines the impact and mechanism of the pilot ECRT policy on green technology innovation in the construction industry using the difference-in-differences (DID) method. The study shows that the ECRT policy significantly enhances green technology innovation in the construction industry in the pilot areas. Specifically, the level of green technological innovation in the construction industry in the pilot areas increased by 23.2% after the implementation of the ECRT policy. Further mechanistic tests show that the ECRT policy promotes green technological innovation in the construction industry by increasing research and development (R&D) investment and upgrading the industrial structure. This paper assesses for the first time the impact of the ECRT policy on green technology innovation from the construction industry's perspective, providing a new perspective for assessing the impact of market-based environmental regulation. This paper is also highly significant for the government to enhance its policies on energy saving and pollution reduction.