Assessing the low-carbon city pilot policy on carbon emission from consumption and production in China: how underlying mechanism and spatial spillover effect?

Abstract

The low-carbon city pilot (LCCP) policy is an important initiative for China to fulfill its international commitment to carbon emission reduction and achieve low-carbon transformation. In this context, this study investigated whether the LCCP policy of China has achieved carbon emission reduction from the production and consumption perspectives and how its underlying mechanism and spatial spillover effect. Using the panel dataset of 285 Chinese prefecture-level cities from 2003 to 2019, this study applied the staggered DID model to examine the effects and its underlying mechanism of the LCCP policy on carbon intensity (CI) and carbon emission per capita (CP). We also conducted heterogeneity and spatial spillover effect analyses using the textual quantification method and spatial DID. Our results show that the LCCP policy effectively reduced CI and CP, but these effects did not appear until the third year of implementation. The above conclusions passed a series of robustness and endogeneity tests. Reducing industrial emissions, improving technological innovation, and optimizing the efficiency of energy usage were three important mechanisms to reduce CI and CP, validating the effectiveness of the LCCP policy. Command-mandatory and voluntary LCCP policy tools achieved better results, and the LCCP policy exerted a significant emission reduction effect on second-tier pilot cities as compared to others. The carbon emission abatement of the LCCP policy has also demonstrated a spatial spillover impact on neighboring cities. This study focused on analyzing the mechanism paths and spatial spillover effects of the LCCP policy impact and provided an important decision-making reference in promoting the LCCP policy for not only China but also other developing countries. Specifically, low-carbon pilot experiences and typical cases should be refined, ways for accelerating the greening and cleaning of energy usage must be explored, and regional joint control and collaborative governance should be established to achieve China's low-carbon transformation.