Building and carbon emissions: Evidence from real estate purchase restriction policy

Abstract

Carbon emission reduction in the building sector plays an essential role in the global mitigation effort, and a policy of limiting the expansion of buildings could be a critical intervention. Previous studies mainly focused on the process and materials in the building sector to discuss ways of building decarbonization rather than the restriction of building expansion. The Real Estate Purchase Restriction policy in China produced powerful enforcement to control the disorder expansion of building construction in China. Using the difference-in-differences model, this study finds that the policy caused approximately 5.7 million tons of carbon emissions decrease per year in the pilot cities, which could save about 52.55 million dollars social cost of carbon. Through the examination of the impact mechanism, we found that the implementation of real estate purchase restriction policy contributed to carbon emissions' reduction via reducing population growth and reducing freight volume.