Evaluation of China’s low-carbon city pilot policy: Evidence from 210 prefecture-level cities

As the largest carbon dioxide emitter, China is working towards the direction of a green economy. As an irreplaceable part of establishing a green economy, the low-carbon city pilot (LCCP) policy is implemented in many large cities in China, and the scope of implementation will be further expanded. However, to date, there has been an absence of empirical studies basing on prefecture-level cities about the evaluation of China’s LCCP policy. Evaluating and optimizing the LCCP policy is constructive to achieve the goal of China’s green economic transition. In this paper, we evaluated the effect of the LCCP policy on China’s low-carbon economic transition by using the difference-in-difference (DID) approach which can effectively alleviate endogenous problems and better evaluate this effect and the panel data of 210 prefecture-level cities in China from 2008 to 2016. The empirical analysis revealed that the LCCP policy inhibited China’s low-carbon economic transition in general. Specifically, the policy worked well in the eastern region but failed in the central region and western region by studying the regional heterogeneity and influence mechanism. The reason is that the LCCP policy can stimulate low-carbon innovation with the help of innovation offset effects in the eastern region, but it failed to do so in the central region and western region. In addition, this paper analyzed the performance of three types of policy tools adopted by local governments to implement the policy, we found that market-economic tools are valuable to improving the low-carbon economic transition in pilot areas, but command-mandatory tools and voluntary tools have failed to achieve the expected objectives. The research results of this article can provide policy recommendations for optimizing the low-carbon policy and provide a reference for countries that are determined to develop a green economy.