Abstract
Low-carbon city construction (LCC) is an important strategy for countries desiring to improve environmental quality, realize cleaner production, and achieve sustainable development. Low-carbon cities have attracted widespread attention for their attempts to coordinate the relationship between environmental protection and economic development. Using the panel data from 2006 to 2017 of prefecture-level cities in China, this study applied the difference-in-differences (DID) method to analyze the effects of LCC on the total factor productivity (TFP) of the cities and its possible transmission mechanism. The results show significantly positive effects on TFP, but the effects on each component of TFP are different. Although the LCC has promoted technical progress and scale efficiency, it has inhibited technical efficiency. The accuracy of the results has been confirmed by several robustness tests. Mechanism analysis showed that the pilot policy of low-carbon cities has promoted technical progress and scale efficiency by technological innovation and the upgrading of industrial structure, but resource mismatches among enterprises have been the main reason for reduced technical efficiency. Regional heterogeneity analysis showed that the effects on TFP in the eastern region have been more significant than in the central and western regions. In the eastern region, they have promoted technical progress, while in the central and western regions, they have promoted technical progress and scale efficiency but hindered technical efficiency. This paper presents our findings for the effects of LCC on economic development and provides insightful policy implications for the improvement of technical efficiency in low-carbon cities.
Highlights
The estimated coefficients are not significant for the full sample but are significantly positive for manufacturing while being significantly negative for non-manufacturing. These results indicate that the pilot cities have significantly restrained the research and development (R&D) expenditures of the non-manufacturing companies, explaining, to a certain extent, the relative decrease in the number of patents granted to them
We found that the low-carbon city construction (LCC) in China has positively affected total factor productivity (TFP), which is similar to the findings of Qi et al [58], whose study of the carbon emission trading policy in China found that its reduction of carbon emissions and energy consumption had not been at the expense of economic development
This study focused on the effects of low-carbon city construction (LCC) on the total factor productivity (TFP) of prefecture-level cities in China, explored the mechanism of how the LCC affected TFP and its components
Summary
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. As an important regulatory policy to improve environmental quality, does low-carbon city construction (LCC) improve TFP to achieve a win-win situation between environmental protection and economic development? To provide recommendations to the departments responsible for policymaking and implementation that promote the sustainable development of China’s economy, this study focused on the effects of the low-carbon city policy on productivity growth and examined if the construction of the pilot cities had achieved improvements in environmental quality at the expense of economic development. This study has contributed to the research on the cause-effect relationship between the LCC and TFP, as well as provided recommendations for the LCC and economic sustainable development of developing countries, by the measurement and analysis of the changes in the upgrading of urban industrial structures, levels of technological innovation, and resource allocation efficiency
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