Environmental protection and economic efficiency of low-carbon pilot cities in China

Abstract

Resolving the contradiction between environmental protection and economic development is essential for sustainable development. As the world’s largest developing country, China has achieved rapid economic growth at the cost of serious environmental pollution. Taking China’s "low-carbon pilot" cities as study objects, we conduct a joint analysis of air quality and productivity to investigate the suitability of low-carbon activity to the economic development model. Using the difference-in-difference method, air quality and labor productivity are set as two explained variables, and the robustness was tested with propensity score matching. We find that the low-carbon pilot measures have improved air quality, but reduced labor productivity, which proves that China's low-carbon city pilots are a "single win" model that focuses on pollution controlling and ignoring "economic incentives." The result implies that measures should be formulated according to the life cycles of different types of local development. By testing the effects of low-carbon pilot cities policy on environment and economy, this paper provides suggestions for its implement in the whole country.