Abstract: Enterprise eco-innovation is the basic path to realize energy conservation and emissions reduction. How the carbon trading system influences enterprise eco-innovation has become a new hot topic. Taking the listed companies participating in the carbon emission trading in Shanghai for example, this paper uses the PSM method to measure the influence of carbon trading on the enterprise eco-innovation based on the counterfactual analysis. The results show that the carbon trading system does not have negative impact on enterprise eco-innovation but helps increase the inputs of enterprise eco-innovation. Carrying out the carbon trading system will promote the enterprise eco-innovation steadily and chronically.