The carbon emission trading scheme (hereafter ETS) impacts firms' production decisions and promotes them to achieve low-carbon transition. This transition entails the movement of both labor and capital factors and consequently triggers re-distribution of factor income. To analyze the impacts of the carbon ETS on factor income distribution, we first theoretically incorporate carbon emission permit as a new factor into the general equilibrium model, shedding light on the potential mechanism. Utilizing city-level panel data from 2003 to 2019 and employing a staggered difference-in-differences (DID) model, we find that the carbon ETS is inclined to benefit labor at the expense of capital, exhibiting a progressively strengthening dynamic effect. Furthermore, we verify the intra-industry and inter-industry low carbon transition are valid mechanisms. Overall, these findings imply that implementing carbon ETS contributes to increasing the labor share of factor income. This study suggests that market-based climate policies have the potential to mitigate excessive reliance on capital and fossil fuels through low-carbon transition. Furthermore, it offers insights into mitigating the declining trend of labor income share.

中文翻译：

---

碳排放交易体系是否会影响劳动力在要素收入中的份额分配？从低碳转型角度

碳排放交易体系（以下简称ETS）影响企业生产决策，促进企业实现低碳转型。这种转变导致劳动力和资本要素的流动，从而引发要素收入的重新分配。为了分析碳排放交易体系对要素收入分配的影响，我们首先从理论上将碳排放权作为一个新因素纳入一般均衡模型，揭示其潜在机制。利用2003年至2019年的城市级面板数据，采用交错双重差分（DID）模型，我们发现碳排放交易体系倾向于以牺牲资本为代价来惠及劳动力，并表现出逐步增强的动态效应。此外，我们验证了行业内和行业间的低碳转型是有效的机制。总体而言，这些研究结果表明，实施碳排放交易体系有助于提高要素收入中的劳动份额。这项研究表明，基于市场的气候政策有可能通过低碳转型减轻对资本和化石燃料的过度依赖。此外，它还提供了缓解劳动收入份额下降趋势的见解。