Spatial spillover effects of climate policy: evidence from the carbon inclusion scheme in the Greater Bay Area in China

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ABSTRACT This study explores the impact of the Carbon Inclusion Pilot (CIP) Scheme in Guangdong on carbon emission efficiency in cities within the Greater Bay Area (GBA) utilizing panel data from 2011 to 2022 in a staggered Difference-in-Difference (DiD) setting. The analysis reveals that the policy has a significant positive effect on carbon emission efficiency in Greater Bay Area cities, leading to spatial spillover effects that benefit neighboring areas. Mechanism testing indicates that the policy achieves these results by reducing per capita electricity consumption and promoting the upgrading of industrial structures within the Greater Bay Area. These findings offer valuable insights for policymakers and stakeholders interested in promoting low-carbon city development and aligning carbon emission reduction strategies with economic growth objectives.

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