Advancing towards a low-carbon urban future in China: the role of producer services agglomeration

The reduction of greenhouse gas emissions is a shared challenge encountered by nations worldwide. As China is on its way toward a green economy, it is worth studying whether producer services agglomeration, a key driver of economic transition, can promote low-carbon urban development. Using panel data of 257 cities across China from 2006 to 2019, this paper examines the influence of producer services agglomeration on urban carbon emissions with spatial econometric models. The findings reveal a positive spatial correlation in regional carbon emissions. The agglomeration of producer services notably decreases the intensity of local carbon emissions, yet it appears to have minimal influence on the emissions from adjacent regions. Enhancing energy efficiency and adjusting the industrial structure are two critical mechanisms by which producer services agglomeration reduces urban carbon emissions. This beneficial effect varies with city type, the abatement effect of producer services agglomeration is more pronounced in non-resource-based cities. When considering city size, the carbon reduction potential of producer services agglomeration is not apparent in smaller cities. As city size increases, the emission reduction effect becomes more apparent. However, in mega-cities, this impact is somewhat diminished. Accordingly, this paper proposes exploring methods of coordinated air pollution management across cities, promoting producer services agglomeration in line with market mechanisms, and driving low-carbon urban development in a manner tailored to local conditions.