To decarbonize the economy and spur high-quality development, formulating effective environmental policies to encourage low-carbon technology innovation is increasingly critical. While the energy-consuming right transaction represents a significant institutional breakthrough, its potential to motivate enterprises towards low-carbon technology innovation remains underexplored. To address this gap, our study utilizes panel data from Chinese listed enterprises between 2009 and 2020, employing the energy-consuming right transaction pilot policy to develop a difference-in-difference model that assesses the policy's impact on low-carbon innovation. Our findings indicate that the implementation of energy-consuming rights transaction has boosted low-carbon innovation efforts by 14.3 %. In-depth analysis shows that R&D investment and green agency costs are crucial mediators, with energy-consuming rights transaction enhancing R&D capital and personnel investments by 2.1 % and 1.5 %, respectively, and reducing green agency costs by 1.8 %. The study also uncovers the moderating role of digital finance, which amplifies the positive effects of energy-consuming rights transaction on low-carbon innovation. Moreover, energy-consuming rights transaction shows a more significant effect on improving low-carbon innovation for low energy-consuming and non-state-owned enterprises. These insights underscore the importance of precisely segmenting energy-consuming enterprises and devising customized policies to meet their unique needs, paving the way for a national energy-consuming right transaction market.
