The effectiveness of subsidies in improving the performance of renewable energy firms has aroused significant research attention in recent years. As subsidy modes may affect corporate financial performance,we have chosen companies specializing in wind and solar energy in the Shanghai and Shenzhen stock markets as samples.The relationships between the subsidy modes and financial performance of these two types of companies are investigated with a panel data model. Results of the total sample indicate that both indirect and non-innovative subsidy have significant effects on the financial performance of renewable energy companies. The regressive coefficient of the former,however, is a negative value, which illustrates that taxation, bonus, and other market-based mechanisms impair corporate profitability. Moreover, the influence of innovative subsidy is weak, which means that the subsidy used for research and development, technical demonstration, and other innovations of renewable energy enterprises have failed to effectively enhance corporate financial performance. In terms of sub-industries, the direct subsidy for wind energy companies has achieved a significant effect. Incomparison, the indirect subsidy and innovative subsidy acquired by solar energy companies have notably reduced corporate profitability. Thissuggests an urgent reform of subsidy policy for this industry is needed. The government should consider differences in the effects subsidies have for wind and solar energy companies when improving subsidy policy. In addition, market-based subsidy mechanisms should be perfected, and the structure of innovative subsidies should be ameliorated.

From a comprehensive standpoint, this paper investigates whether and to what extent the carbon market functions in the context of the developing world. Taking advantage of a unique seven-year-plant-level panel dataset (2010–2016) on Chinese power plants, we use a matched difference-in-differences strategy to identify the joint impact of China’s carbon emissions trading (CET) pilot policy on carbon emissions reduction (objective), energy mix improvement (mechanism), and air copollutant reduction (cobenefits). We find that China’s CET pilot policy effectively lowered carbon emissions by approximately 38.61%. Further analysis shows that plants reduce carbon emissions primarily by reducing coal consumption (approximately 30.79%). Most importantly, China’s CET pilot policy induces substantial air copollutant abatement benefits by reducing sulfur dioxide and nitrogen oxides by approximately 52.19% and 48.62%, respectively. State-owned plants are more affected by China’s CET pilot policy, and the policy effects show disproportionate environmental inequality. Furthermore, the effects are not affected by the rate-based allowance allocation structure that is adopted by China’s national carbon market.