A　carbon　market　is　a　widely　used　policy　tool　worldwide.　This　study　employs　a　difference-in-differences　(DID)　model　to　estimate　the　impact　of　a　carbon　trading　policy　on　green　technology　innovation　and　applies　a　spatial　DID　(SDID)　model　to　investigate　its　spatial　spillover　effects.　The　findings　suggest　that　China＇s　carbon　market　effectively　promotes　green　technology　innovation,　as　green　invention　patent　applications　for　listed　enterprises　increase　by　28.8%　when　implementing　the　carbon　trading　policy.　Moreover,　implementing　a　carbon　trading　policy　promotes　local　green　technology　innovation　and　has　spatial　spillover　effects　on　neighboring　cities.　Furthermore,　heterogeneity　test　results　show　that　the　spatial　spillover　effects　differ　by　geographical　region,　economic　development　levels,　ownership　type　(state-owned　and　non-state-owned　enterprises),　and　degree　of　government　intervention.　Therefore,　we　suggest　enhancing　enterprises＇　technological　innovation　by　providing　policy　support　and　prioritizing　the　development　of　carbon　markets　in　regions　with　high　economic　development　levels.