Does China's carbon inclusion policy promote household carbon emissions reduction? Theoretical mechanisms and empirical evidence

Abstract

China's carbon inclusion policy (CIP) is an innovative voluntary emission reduction mechanism that aims to drive consumption-side emission reductions and achieve dual carbon goals. However, the effectiveness of the policy has not yet been assessed. To fill this research gap, this study evaluated the impact of CIP on urban household carbon emissions based on panel data from 283 cities in China from 2006 to 2020. This was conducted using staggered difference-in-differences (DID), synthetic DID, and spatial DID methods. The results showed that the CIP significantly reduced household carbon emissions through the green consumption awareness enhancing effect and green supply capacity improving effect. Heterogeneity tests indicated that carbon reduction effects are stronger in electricity and gas consumption and relatively modest in the heating and transportation domains. Cities with higher financial technology levels and greater government intervention had better policy outcomes. CIP also exhibited spatial spillover effects on household carbon emissions and synergistically reduced air pollution. Despite incurring certain economic costs, it ultimately promoted regional economic growth. This study can provide theoretical and empirical evidence for China to promote CIP and achieve its dual carbon goals.