This study constructs a quasinatural experiment based on carbon emission trading system（CETS）pilot zones, and then explores the effect of CETS on corporate energy conservation and emission reduction (ECER). Using a staggered differenceindifference model and data on the ECER of Chinese listed firms from 2010 to 2017, our findings reveal that firms participating in the CETS trials exhibit better ECER performance than their counterparts, suggesting that CETS promotes corporate ECER performance. In addition, CEOs’ overseas experience reinforces the positive effect of CETS on ECER performance. Moreover, the positive impact of CETS on ECER performance is more pronounced for firms in polluting industries and highly competitive industries, CETS is significantly positively associated with both green innovation and environmental cooperation in the value chain, and CETS can significantly mitigate carbon emissions at the firm level. Our findings provide important references to understand the governance role of CETS.