Can low-carbon city pilot policies significantly improve carbon emission efficiency? Empirical evidence from China

Abstract

This study estimates the effect of low-carbon city (LCC) pilot policies on carbon emission efficiency (CO2E) measured by Slacks-based measure (SBM) on panel data of 208 cities from 2003 to 2016 through the Difference in differences (DID) model with propensity score matching (PSM) method. The results show that the overall LCC pilot policy can significantly improve the CO2E of the pilots by 6.6%, and the policy effect of the second batch pilots is significant while that of the first batch is insignificant. In addition, the LCC pilot policy has great regional heterogeneity. The policy effects of first and second-tier cities, municipalities, and provincial capital cities are negative, while those of third-tier cities and below are positive. The LCC pilot policy benefits CO2E in eastern, northeastern, and central China while slightly hindering CO2E in western China. The LCC policy has a better carbon efficiency improvement effect in resource-based cities, especially in maturing cities. In conclusion, the LCC policies have achieved certain results and should be implemented continuously. However, each city should formulate suitable low-carbon plans based on its own economic, political, geographic, and resource characteristics and establish a target accountability system for controlling greenhouse gas emissions.