Can the Establishment of Free Trade Zones Promote Carbon Emission Reduction? ----Based on Multi-period Double Difference Model

As the Shanghai Free Trade Zone (FTZ) celebrates its 10th anniversary, it is crucial to examine the impact of the FTZ's construction on regional carbon emissions under the dual carbon targets of carbon neutrality and carbon peaking. Based on panel data from 282 prefecture-level cities between 2006 and 2021, this article aims to provide insight into the impact of the Free Trade Zone (FTZ) pilot policy on urban carbon dioxide emissions levels. By constructing a difference-in-differences (DID) model, this study aims to investigate the effects of the Free Trade Zone (FTZ) policy on carbon emission reduction. In order to perform a mechanism test, two more mechanistic variables—namely, technical advancement and upgrading of the industrial structure—are incorporated. According to the findings from experiments, the policy of free trade zones can effectively reduce carbon emissions from urban areas. This is primarily achieved by optimizing the industrial structure and scientific and technological mechanisms.