Carbon emission reduction effect of the low-carbon pilot policy in China: Mechanism testing and path identification

Abstract

Since China's low-carbon pilot policy (LCPP) was launched in 2010, it has moved closer to accomplishing its carbon peak and neutrality targets. However, there is still scant literature on how to accurately consolidate the achievements of the policy in the pilot cities within which it was implemented. This research seeks to address the gap in the current literature by providing a theoretical basis for estimating the effect of LCPP on urban CO2 using a multi-period difference-in-differences model. Panel data from 283 Chinese cities from 2006 to 2019 was utilized. We found that: (1) The LCPP evidently reduced the pilot cities’ CO2. (2) Mechanism verification shows that the LCPP curbs CO2 emissions by improving urban technological innovation and reducing energy consumption. (3) Heterogeneity analysis displays that the CO2 reduction effect is more pronounced in eastern areas, non-resource-based cities, and urban agglomerations. The LCPP has accelerated China's CO2 reduction process and provided Chinese characteristics methods for limiting CO2 emissions and reducing climate change. This is crucial for advancing urban low-carbon governance in the broader country.