Abstract: The rational intergovernmental allocation of environmental authority is key to achieving carbon peak and carbon neutrality goals. Based on a quasi-natural experiment of vertical reform in environmental protection institutions below the provincial level, panel data from 278 prefecture-level cities from 2006 to 2020 were used to empirically examine the impact of centralizing environmental authority under environmental protection departments on carbon emission efficiency. The findings indicate that the vertical reform of environmental protection institutions below the provincial level can improve carbon emission efficiency, with green technology innovation enhancement and industrial structure optimization serving as its influencing mechanisms. Heterogeneity tests reveal that the promoting effect of this reform on carbon emission efficiency is more pronounced in non-legacy industrial base cities, provincial capitals, and sub-provincial cities. Additionally, the implementation of this reform exhibits spatial spillover effects on carbon emission efficiency. Drawing on the research findings, policy recommendations are proposed from three aspects: advancing the vertical reform of environmental protection and integrating it with low-carbon development mechanisms, designing region-specific governance approaches according to local characteristics, and strengthening cross-regional cooperation and compensation frameworks.