Does the Low-Carbon Construction of Cities in China Reduce Carbon Emission Intensity?

Abstract

Currently, realizing the coordinated green development of the economy and environment has become the focus of all walks of life. To achieve this goal, it is important for cities to promote carbon reduction. China has implemented a low-carbon city pilot (LCP) policy since 2010 to achieve green transformative development. In this context, this study aims to assess whether the LCP policy achieves carbon peaking and carbon neutrality goals. Using 2007-2019 prefecture-level panel data from China and a time-varying difference-in-difference (DID) model, we conduct a quasi-natural experiment. The empirical results show that the carbon emission intensity (CEI) is greatly reduced in cities that implemented the LCP policy. Compared with the control group, the average value of CEI of cities in the experimental group is approximately three percentage points lower, and the robustness test results prove the reliability of the baseline estimates. In addition, we examine the time lag effect and find that in the experimental group, the CEI of cities is significantly lower in the fourth year and has a tendency to gradually increase. Meanwhile, the heterogeneity analysis in this research groups the samples according to economic development, population agglomeration and resource endowment. We find that in cities with better economic development, higher population agglomeration and relatively underdeveloped resource endowment, there is a greater reduction in CEI. Finally, we conduct a mechanism test and find that in the experimental group, the CEI of cities is severely reduced due to industrial structure optimization, environmental enforcement strengthening and technological innovation capabilities enhancement.