Evaluation of low carbon city pilot policy effect on carbon abatement in China: An empirical evidence based on time-varying DID model

Abstract

Cities play a pivotal role in promoting carbon emission reduction. Since 2010, the Chinese government has developed several batches of low-carbon city pilots continuously. In this context, this research investigates whether the low-carbon city construction pilot policy of China has achieved the carbon abatement target. It conducts a quasi-natural experiment using the panel data from 2005 to 2016 of the prefecture-level cities. The innovation of this research is that it employs the time-varying difference-in-difference (DID) model to compare the carbon abatement targets between the pilot and non-pilot cities and between before and after the implementation of the pilot policy. Additionally, it analyzes the different effects of low-carbon city pilots on eastern, western, and central China, as well as the cumulative and dynamic effect of low-carbon city pilots over time. The research results are as follows. (1) The low-carbon city pilot policy has effectively promoted the reduction of carbon dioxide emissions brought about by the growth of GDP per unit (carbon emission intensity). However, the effects of pilot policies vary significantly in different regions. The policy effect of the pilot cities in eastern China is significant, while in western and central China is not. Additionally, compared with the sub-provincial cities with higher administrative power, the pilot policies in other cities have more obvious effects. (2) The superposition effect of different policies is significantly different. The carbon trading pilot policy can be well-coordinated with the low-carbon city pilot policy. However, the implementation of the new energy vehicle pilot policy would lead to the overestimation of the effect of the low-carbon city pilot policy. (3) Energy structure, industrial structure, and innovation level have a significant impact on the effect of low-carbon city pilot policies. On this basis, the research finally proposes a series of suggestions that are beneficial to the implementation of the pilot policy. Specifically, it is important to encourage cities rather than provinces to develop low-carbon pilots; the impact of marketization on low-carbon city construction should be enhanced; the low-carbon city pilot policy in less developed regions can be implemented by promoting energy structure, industrial structure, and innovation level.