Power industry is the industry with the highest carbon emissions in China

and it is also the trading subject of the national carbon market. Promoting the low-carbon development of power industry is an important starting point for China to achieve the “double-carbon” goal. Based on the panel data of power industry in China's 30 provinces from 2005 to 2019

considering the spatial correlation of carbon intensity of electric power

a spatial difference-in-differences model is constructed to analyze the impact of carbon trading policy on the carbon intensity of the power industry

and test the spatial spillover effect of carbon trading policy. On this basis

a mediation effect model is further established to analyze the impact mechanism of carbon trading policy. The results show that

carbon trading policy can significantly reduce the carbon intensity of the power industry

and this inhibition is increasing year by year. The emission reduction effect of policy on carbon intensity is better than that of total carbon emission.The carbon intensity of the power industry has a significant spatial positive correlation. The implementation of carbon trading policy in pilot areas can form a policy spillover effect and promote carbon emission reduction in adjacent areas. Carbon trading policy mainly reduces the carbon intensity of power industry by adjusting the energy consumption structure

reducing power consumption intensity and promoting the upgrading of industrial structure.Based on the above conclusions

some relevant suggestions are put forward.