The adoption of emissions trading scheme (ETS) and renewable energy sources (RES) policies have been essential to achieving China’s national targets for reducing CO₂ emissions and developing non-fossil energy sources. The combination of ETS and RES policies raises an important issue: What is the effect of combining ETS and RES policies on the existing carbon market and economy? Focusing on the design of the nationwide carbon market, this paper uses a multi-regional computable general equilibrium (CGE) model to analyze the economic impacts of ETS policy when combined with RES policies in China. The results show that China’s annual ETS emissions cap should decrease by 0.3% to maintain stable CO₂ prices and achieve the targets in China’s intended nationally determined contribution (INDC). It is estimated that the CO₂ price on the nationwide carbon market would decrease by 11–64% when the renewable energy subsidy rate increases from 20 to 100%, and the total trading volume would decrease by 3–25%. The results also show that the combination of an ETS and a feed-in tariff (FIT) results in greater GDP cost and welfare loss in all Chinese regions, increasing the total social cost by 0.01–0.06%.

Known as the major capital providers in Belt and Road countries and the largest carbon emitter in the world, what role China's outward direct investment (ODI) plays in carbon neutralization has become a matter of concern. This study aims to measure the impact of China's ODI on the carbon emissions of Belt and Road countries. Based on an econometric model and an inter-regional input–output model, a new model measuring the carbon emission effects of ODI is developed. The empirical results show that (1) in general, China's ODI generates an emission-reduction effect in Belt and Road countries; (2) The relationship between the emission-reduction effect and income level of host countries shows an approximate inverted U-shaped trend; and (3) China's ODI generates stronger emission-reduction effects on capital-intensive industries. This study quantitatively measures the scale of carbon emission-increase and reduction effect, which is relatively lacking in previous studies. This study explores the heterogeneity from the perspectives of regions, countries and industries. The authors have compiled an inter-regional input–output table for the Belt and Road countries for 2014 to provide a broad basis for the study of related issues.