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In achieving the "double carbon" target, the emission trading system (ETS), as a key market-based emission reduction mechanism, assumes the responsibility of addressing climate change and implementing reform. Most studies focus only on the emission reduction effects of green policy, but weighing the relationship between emission reduction and development is a practical dilemma to be faced. Taking China's pilot ETS as an example, this problem was analyzed using the synthetic control method, and the specific impact channels are discussed. It was found that: (1) Carbon emissions and carbon emission intensity in the pilot ETS areas of Tianjin, Hubei and Chongqing decreased significantly, and economic growth has progressed to a certain extent. Robustness tests basically verified the effectiveness of the policy implementation. (2) The pilot ETS mainly has an impact through the transformation and upgrading, and technological innovation channels, promoting significant improvements in energy structure, industrial structure, energy efficiency and the number of patent applications. This study releases a positive signal for the compatibility of emission reduction and economic development goals at the national level for China's pilot ETS. • The pilot ETS significantly reduced carbon emissions and carbon emission intensity. • The pilot ETS promoted economic growth to some extent. • Transformation and upgrading, and technological innovation are the influencing channel. • The SCM method can synthesize the "ideal" control unit to evaluate the policy effects. [ABSTRACT FROM AUTHOR]