Dual CO2 mitigations with diminishing margins: Evidence from China’s intensity-based national emissions trading scheme

China's national emissions trading scheme (CN ETS) is the world's largest carbon market in terms of covered emissions, yet rigorous empirical evidence on its mitigation effectiveness remains limited. Using a balanced panel of 1,957 thermal power units from 2018 to 2024, this study estimates the causal impacts of compliance pressure under the CN ETS on CO 2 emissions. Units with allowance deficits reduced CO 2 emission intensity by 0.8% and total emissions by 3.5%. Emission reductions are concentrated among small coal-fired units and are driven by efficiency improvements, higher heat supply ratios, and improved fuel quality. In contrast, the impacts on large coal-fired units are limited. Greater intensity reductions are observed among local state-owned and private firms, captive plants, non-pilot units, and technologically less advanced units. Overall, the intensity-based design provides limited incentives to curb output among low-emission-intensity units, suggesting the intensity-based mechanism functions as a transitional arrangement toward a cap-and-trade system.