Boosting the green total factor energy efficiency in urban China: Does low-carbon city policy matter?

Shock or opportunity? Unveiling the effect of low-carbon transition on employment

The stabilization of growth and preservation of employment are the primary objectives of the current new economic normal. Investigating whether the low-carbon transition can be an opportunity or a shock for employment expansion in green development requires thorough examination. This study utilizes multi-temporal difference-in-difference (DID) models, analyzing comprehensive panel data from China (2007-2019) to assess the impact of the Low-carbon City Pilot (LCCP) policy on employment at meso-regional and micro-firm levels. Empirical findings robustly reveal that LCCP significantly boosts employment, with average treatment effects of approximately 0.548% and 5.892% at regional and firm scales, respectively. Positive impacts vary based on ownership, location, industry type, and energy consumption within enterprises. Notably, state-owned enterprises, those in the eastern region, engaged in secondary industries, and with high energy consumption experience pronounced positive effects. Mechanism analysis further reveals that LCCP boosts employment via promoting government environmental subsidies and expanding enterprise investment scale to create more jobs. These findings provide policy recommendations for further promoting low-carbon transition and expanding employment to achieve the win-win goal of sustainable development.

Innovation or introduction? Impacts of the low-carbon city pilot policy on the pathways toward green technology progress

To examine whether the low-carbon city pilot (LCCP) policy influences the green technology innovation (GTI) or embodied technology introduction (ETI), two different pathways to green technology progress, in manufacturing enterprises in China, this study employs a staggered difference-in-difference (DID) model to evaluate the effects of the policy. The findings suggest that the LCCP policy has stimulated an increase in the quantity of GTI and ETI among enterprises, but reduced the quality of innovation. Large, high-carbon-intensity, and state-owned enterprises are more likely to engage in GTI, while small, low-carbon-intensity, and non-state-owned enterprises prefer ETI. The policy is effective in alleviating financing constraints and improving environmental concerns. Both GTI and ETI play a crucial role in economic performance, while the latter also promotes environmental and ESG performance. Accordingly, we recommend establishing a policy-compatible evaluation system, strengthening mandatory and incentive measures, and cultivating a green innovation ecosystem, etc., to improve the performance of the LCCP policy.

Low-carbon city construction, spatial spillovers and greenhouse gas emission performance: Evidence from Chinese cities

Low-carbon cities (LCC) are conducive to low-carbon development and reshaping the urban economic growth model. However, it is still unknown whether it has a synergistic mitigation effect on other greenhouse gases (GHGs). In this study, a dataset comprising 283 Chinese cities spanning the period 2003 to 2019 is chosen. We employ spatial difference-in-difference (SDID) modeling to investigate both the impacts and mechanisms of LCC on GHG emissions performance. The results show that (1) LCC notably lowers local GHG emissions, enhances emission efficiency, and improves GHG emissions performance in neighboring cities within a 1000 km radius. (2) LCC indirectly enhances the GHG emissions performance of local and neighboring cities through energy intensity and green technology innovation. Notably, LCC boosts the local GHG emissions performance by industrial structure upgrading and resource allocation but harms the positive spillover effects on nearby cities due to the siphoning effect. (3) The effect and spatial impact of LCC on GHG emission performance is notably pronounced in eastern cities, non-resource cities, and key environmental protection areas. The results of the study will further promote the development of LCC and provide an important decision-making reference for urban low-carbon sustainability.

The impact of regional policy implementation on the decoupling of carbon emissions and economic development

The contradiction between economic growth demands and the achievement of the "dual-carbon" goals at the regional level is a pressing issue in China. As a significant economic and cultural center in the western region of China, the Guanzhong Plain urban agglomeration has experienced rapid development and urbanization, making it one of the key areas for national development. Therefore, greater attention should be given to carbon emission reduction in this region. This study focuses on the dataset from 2010 to 2019 in the Guanzhong Plain urban agglomeration, utilizing an input-output table to construct a carbon dioxide emission inventory. The research investigates the impact of regional classification on carbon emission levels within the Guanzhong Plain urban agglomeration. Furthermore, the Tapio decoupling analysis method is employed to assess the decoupling coefficient between regional economic development and carbon emissions. Additionally, the Theil index inequality analysis method is utilized to measure the disparities in per capita carbon emissions among cities within the region. Research findings indicate the following: 1) The regional classification of the Guanzhong Plain urban agglomeration is an effective policy for reducing regional carbon emissions and promoting carbon emissions reduction. 2) There exist variations in energy and industrial structures among cities within the urban agglomeration, necessitating tailored measures for low-carbon transition based on the specific circumstances of each city. 3) The regional classification of the urban agglomeration significantly influences the degree of decoupling between economic development and carbon emissions, with a trend towards stronger decoupling. The study suggests that cities within the Guanzhong Plain urban agglomeration should adopt measures aligned with their natural conditions and economic characteristics to achieve a low-carbon transition. Leveraging the regional cooperation capacity of the urban agglomeration is crucial to decouple economic development from carbon emissions, thereby promoting sustainable economic growth and environmental protection in a mutually beneficial manner.

Can environmental protection and banking development be synergized?-an analysis based on the low-carbon city pilot in China

The low-carbon city (LCC) pilot policy is significant in tackling carbon emission reduction and environmental protection. Several studies have demonstrated that LCC policy dramatically decreases air pollution in cities for environmental preservation, while there is a shortage of research on banking development. Using city-level data from 2005 to 2018 in China, we examine the impact of the LCC pilot policy on the growth of the banking sector by using a difference-in-difference (DID) model and analyze the underlying transmission mechanism. The empirical result demonstrates that the construction of LCC significantly impedes the growth of the regional banking sector, and the conclusions above hold up to a battery of tests. First, the LCC policy drastically reduces the scale of industries in the pilot cities, including secondary industry output, tertiary industry output, fixed asset investment, and fixed asset balance. Second, the LCC policy encourages industrial reorganization in the pilot cities, as demonstrated by a change in market demand from high carbon-emitting enterprises and non-state-owned enterprises to low carbon-emitting enterprises and state-owned enterprises, respectively. The results indicate that the LCC policy produces credit risk at enterprises and conveys it to banks, resulting in a retarding effect on banking development.

Impact of low-carbon city pilot policies on urban green innovation from the perspective of spatial and temporal heterogeneity

The low-carbon city pilot policy (LCPP) in China is an active response to climate change, with cities serving as the main agents of action. Enhancing green innovation at a city-wide level can effectively support the promotion of pilot cities' efforts towards sustainable growth. Using panel data from 204 prefectures collected from 2005 to 2019, we adopted the time-varying difference-in-differences (DID) model and the spatial Durbin model combined with time-varying DID (SDM-DID) to determine the impact of the LCPP on urban green innovation and its temporal and spatial heterogeneity. Empirical findings showed that (1) LCPP had a significant positive impact on urban green innovation, and green invention patents had a greater green innovation effect than green utility model patents. (2) Heterogeneity analysis revealed that in terms of geographical location, the pilot policy was more effective in promoting urban green innovation in the eastern and central regions in comparison to the western region. At the city level, the pilot policy had a greater impact on green innovation in first- and second-tier cities. With regard to city scale, large-scale cities showed a greater impact on green innovation than small- and medium-sized cities. (3) Mechanistic testing revealed that LCPPs stimulated urban green innovation by talent aggregation, increasing government support for innovation, and public participation; but the mechanism for alleviating financing constraints has yet to be effectively validated. (4) The LCPP showed a spatial spillover effect, whereby one city's low-carbon governance yielded institutional dividends for neighboring cities both geographically and economically, and the impact was more pronounced in those cities that were not resource-based. This study presents empirical evidence at the urban and spatial levels, supporting the comprehensive promotion of low-carbon city construction and development in China.

Incentive or constraint? Comprehensive impacts of green credit policy on industrial energy intensity

Green credit policy (GCP) has dual attributes of being both an "environmental regulation" and a "financial instrument". Understanding its role in facilitating industrial green transformation is crucial. However, there is limited theoretical and empirical evidence on the impact of GCP on industrial green transformation. This research fills this gap by comprehensively investigating the impacts and mechanisms of GCP on industrial energy intensity (EI) in China, considering both incentive and constraint effects. Theoretically, the environmental and financial impacts of GCP are merged into a unified analytical framework based on a heterogeneous enterprise model. Empirically, diverse empirical methods, including difference-in-differences (DID), difference-in-differences-in-differences (DDD), and mediating effects models, are adopted to examine whether GCP can promote green innovation or accelerate financial constraints. Results show that (1) GCP significantly decreases EI, especially among high-polluting enterprises (HPEs). The impact of incentives is far greater than that of constraints. (2) Regarding the incentive effect, energy substitution and innovation offsets exert a primary influence on reducing EI. (3) The constraint effect is caused primarily by rising financing and pollution abatement costs. (4) Heterogeneity analysis shows that the inhibiting effect of GCP is more significant in non-state-owned enterprises, underdeveloped financial markets, and abundant energy endowments. This paper provides a theoretical framework and new empirical evidence for policymakers to design effective policies for promoting industrial green transformation.

Does the opening of high-speed rails improve urban carbon efficiency? Evidence from a spatial difference-in-difference method

High carbon emission efficiency is an important guarantee for achieving the goals of "carbon peaking" by 2030 and "carbon neutrality" by 2060. Based on the panel data of prefecture-level cities from 2003 to 2018, the spatial difference-in-difference model is used to empirically test the spatial spillover effect of the opening of high-speed rail (HSR) on urban total factor carbon emission efficiency (TFCEE). The results show that the spatial correlation of TFCEE between regions is positive, and the opening of HSR has a significant positive spatial spillover effect on TFCEE. The conclusion is still valid after a series of robustness tests. We further employ a mediating effects model to verify that green technology innovation and labour resource mismatch are two important channels of influence for the opening of HSR to improve TFCEE. The heterogeneity analysis shows that the opening of HSR significantly promotes the higher development level and the provincial capital TFCEE.

The driving influence of multidimensional urbanization on green total factor productivity in China: evidence from spatiotemporal analysis

China is experiencing a swift transformation from a rural to an urban society. This societal transition is the result of a country's ambition toward economic development. Rapid urbanization impacts on human wellbeing, environment, and infrastructure. Unlike many cases of urban extension, China's urbanization has led to increase in environmental issues, rather than to contain, and posed serious challenges to achieve sustainable development. To date, nevertheless, there is a little empirical enquiry on the spatiotemporal effects of multidimensional urbanization on green total factor productivity. Taking this into account, this article constructs a spatial panel data model based on 283 Chinese cities during 2006-2019. The results showed that the three types of urbanization (i.e., population, land, and economic) have positive effect on green total factor productivity (GTFP). Population urbanization has indirect positive effect on GTFP. Local land urbanization inhibits while surrounding land urbanization promotes GTFP. Economic urbanization has positive direct effect on GTFP. Considering regional heterogeneity, population and economic urbanization have positive effect on GTFP in eastern region. In central region, land urbanization significantly promotes GTFP, while economic urbanization has significant negative effect on GTFP. In the western region, the three types of urbanization are not conducive to GTFP. Considering sized heterogeneity, population and economic types of urbanization have significant negative effect on GTFP in small- and medium-sized cities. In large cities, the three types of urbanization have significant positive effects on GTFP. Considering temporal heterogeneity, the three types of urbanization significantly promote GTFP before 2014, but economic urbanization deteriorates GTFP after 2014. Our results recommend loosening Hukou system, improving land use efficiency, and developing technology and knowledge-intensive industries.

Development zone policy and urban carbon emissions: empirical evidence from the construction of national high-tech industrial development zones in China

As a key strategy to promote system reform, improve the investment environment, and encourage industrial agglomeration, the national high-tech industrial development zone (NHTDZ) policy in China can not only reduce energy consumption through the scale effect but also improve energy efficiency by modernizing industrial structure and fostering technological innovation, thereby alleviating environmental pollution. Existing studies, however, focus solely on the effects of NHTDZ policy on social and economic development, ignoring their impact on the ecological environment, especially carbon (CO₂) emissions that contribute to global warming. Thus, this article analyzes a panel data of 285 prefecture-level cities and above in China from 2003 to 2019 to assess the influence of NHTDZ policy on CO₂ emissions, treating the NHTDZ construction since 1988 as a quasi-natural experiment. The results indicate that the NHTDZ policy would mitigate urban carbon emissions, particularly in middle, southeastern, medium-sized, resource-based (RB), non-key environmental protection (non-KEP), and non-two control zone (non-TCZ) cities. In addition, the mediation mechanism test demonstrates that the environmental benefits of the NHTDZ policy in China are attributable to the scale effect, the structural upgrading effect, and the technology innovation effect. The NHTDZ policy would lower per capita CO₂ emissions by reducing energy consumption, upgrading industrial structure, and promoting green technology innovation.

Greening China's Growth: Assessing the Synergistic Impact of Financial Development and Technological Innovation on Environmental Pollution Reduction-A Spatial STIRPAT Analysis

To achieve sustainable economic development in China, it is crucial to balance economic growth and environmental protection. Financial capital and technology can contribute positively to environmental pollution control. This study employs the Cournot model to examine the impact of financial development and technological innovation on environmental pollution at the micro level. It utilizes the spatial STIRPAT model to analyze inter-provincial panel data from China between 2005 and 2020. The results show that China's ecological environment pollution exhibits significant spatial dependence, and heavily polluted areas tend to agglomerate. While improving financial development can increase regional environmental pressure, positive spatial spillover improves environmental quality in neighboring areas. Conversely, technological innovation reduces local ecological pressure, with negative spatial spillover effectively curbing environmental pollution in surrounding regions. The results support the environmental Kuznets curve (EKC) hypothesis, which posits an inverted U-shaped relationship between economic growth and environmental pressure, while population growth increases environmental pressure. The findings are robust and have important policy implications.

The impact of environmental supervision on firms' energy efficiency: evidence from the Environmental Protection Admonishing Talk policy in China

Enhancing energy efficiency is an important issue for countries facing pressures from energy shortages and environment pollution. Given increasing interest in the role of environmental supervision and the current lack of empirical evidence on this topic, this study investigates the impact of environmental supervision on firms' energy efficiency by taking the Environmental Protection Admonishing Talk (EPAT) policy in China as a quasi-natural experiment. Using the difference-in-differences method and the panel data of more than 3 million firms in China from 2008 to 2016, we find that environmental supervision improves firms' energy efficiency. This finding is validated by robustness tests and the difference-in-differences method combined with propensity score matching. The EPAT policy has varying effects on firms based on their location and size. A mechanism analysis shows that the EPAT policy improves firms' energy efficiency mainly by incentivizing them to adopt new technologies and transforming their modes of production. These findings can provide novel microscopic evidence on environmental supervision and energy efficiency and offer clues for the improvement of environmental enforcement in developing countries.

The Low-Carbon Policy and Urban Green Total Factor Energy Efficiency: Evidence from a Spatial Difference-in-Difference Method

In the post-epidemic background of the low-carbon economy and sustainable development, the low-carbon city pilot program (LCCP) is viewed as a practical method of improving energy efficiency. This study explores the spatial spillover effects of LCCP on green total factor energy efficiency (GTFEE) by developing a spatial difference-in-difference (SDID) model. Furthermore, we apply the mediating effects model to verify whether the rational allocation of resources is an influential channel for the spillover effect of LCCP policies. The results indicate that the LCCP policy has not only improved the local GTFEE by approximately 1.8%, but it also has a profound impact on the surrounding regions as well, which is about 76.5% that of the pilot cities. Additionally, the estimated results of the mediating effect model indicate that optimizing labor force and capital allocations are two essential channels through which the LCCP policy may contribute to improving regional cities' GTFEE. Accordingly, the pilot cities should establish specific measures for rational resource allocation and promote the spatial spillover model of sustainable development.

Can River Chief System Policy Improve Enterprises' Energy Efficiency? Evidence from China

The river chief system (RCS) is an autonomous environmental policy implemented by local governments in China that incorporates environmental responsibilities into the performance evaluation. Although existing literature suggests that RCS can reduce water pollution, the impact of RCS on energy efficiency has not been assessed. Therefore, this paper compiles data on industrial enterprises and industrial pollution in China from 2003 to 2013 and empirically examines the impact of RCS on green total factor energy efficiency (GTFEE) by using a multiple difference-in-difference approach. The results show that RCS significantly enhances firms' GTFEE, and a series of tests confirm the robustness of the findings. Second, we further explore how RCS affects GTFEE, the mechanism tests conclude that the RCS improves GTFEE mainly through optimizing energy structure and promoting technological innovation. Third, compared with small firms, exporters, and firms in non-heavy polluting industries, the RCS has a greater effect on improving the GTFEE of large firms, non-exporters, and firms in heavily polluting industries. This study provides new and novel ideas for emerging countries to improve environmental policies and achieve sustainable development.

Analysis of spatiotemporal difference and driving factors of green total factor energy efficiency in RCEP members: insights from SBM-GML and Tobit models

It is vital to determine the changing spatiotemporal patterns and driving factors of green total factor energy efficiency (GTFEE) in order to design scientific policies to promote energy efficiency in the Regional Comprehensive Economic Partnership (RCEP) region. From 2010 to 2019, the super-efficient SBM model and the global Malmquist-Luenberger index provide an appropriate framework for measuring the spatiotemporal evolution of GTFEE and the dynamics of energy productivity in RCEP countries. With the coefficient of variation and the Thiel index, an extensive view of the spatiotemporal variance in GTFEE is offered, taking regional heterogeneity into account. Furthermore, the Tobit model is introduced to investigate the factors influencing the GTFEE of RCEP members, which may address the restricted values of the dependent variable when compared to the least squares regression model. Findings suggest that (1) The GTFEE of RCEP members tends to be low and unevenly distributed spatially and temporally, with much room for improvement. (2) The energy productivity index fluctuates strongly, and the improvement primarily comes from technological progress. (3) The Non-ASEAN region possesses higher GTFEE than the ASEAN region, albeit regional variations are diminishing. (4) In terms of the major factors influencing the regional GTFEE, the non-ASEAN region looks to be distinct from the ASEAN region. The findings shed light on the trends and influencing factors of GTFEE in RCEP and serve as a resource for international energy cooperation and sustainable development.

The impact of the establishment of carbon emission trade exchange on carbon emission efficiency

The China government focuses on changes in carbon emission efficiency with establishing carbon emission trade exchange (CETE). It is meaningful to study whether the pilot CETEs can facilitate the betterment of carbon emission efficiency. Using the data of 283 cities in China within 2006-2019, this article gauges the carbon emission efficiency with the SBM-DEA model. This paper analyzes the impact of China's pilot CETEs, which was gradually launched from 2013 to 2014, on carbon emission efficiency through the time-varying difference-in-difference (DID) model. Finally, the mediating effect model is further used to analyze the impact mechanism of the pilot CETEs on carbon emission efficiency from the perspectives of innovation investment and pollution control investment. The results reveal that the carbon emission efficiency of each city from 2006 to 2019 is not very ideal. All cities have some room to facilitate the carbon emission efficiency. The pilot CETEs have increased the carbon emission efficiency and reduced carbon dioxide emission. The policy influences the carbon emission efficiency through innovation investment and pollution control investment, which represent long-run and short-run mechanism respectively.

The north–south gap and spillover effect of Chinese service industry green development

Taking the Qinling-Huaihe River as the boundary, this paper divides the Chinese service industry into north and south regions. The current study calculates the green total factor productivity of the Chinese service industry from 2003 to 2019 by using the DEA-Malmquist productivity index method. The influencing factors of the service industry in the north and south of China are tested by the Moran index and the spatial Durbin model. The results show that the green total factor productivity of the Chinese service industry shows great regional heterogeneity. The average green total factor productivity of northern China is 1.4 percentage points lower than that of southern China. The leading factor for the growth of green total factor productivity in southern China is technological progress, while TFP in northern China mainly depends on technical efficiency improvement. The results of spatial econometric regression show that the intensive level of producer services plays a significant role in promoting the green development of the service industry. The transportation infrastructure can significantly promote the green development level of the service industry. Finally, some suggestions are provided to narrow the gap between the north and south of the Chinese service industry.

Does Administrative Division Adjustment promote low-carbon city development? Empirical evidence from the "Revoke County to Urban District" in China

The carbon emission reduction in city regions as a result of the optimization of urban spatial layout is crucial for combating global warming and has garnered widespread attention in recent years. There is little evidence, however, that a specific spatial optimization technique has a substantial effect on urban spatial layout and carbon dioxide (CO₂) emissions. As an effective tool of hierarchical network governance in China, Administrative Division Adjustment (ADA) has the potential to achieve this goal, due to its redistributive effects on urban space resources. Therefore, we utilize the "Revoke County to Urban District" (CTD)-one of the common and typical ADA policies-as a case study to examine its environmental implications, based on the mediation mechanism of urban spatial layout. The empirical results from a panel dataset of 285 prefecture-level and above cities in China indicate that the CTD will reduce urban CO₂ emissions, especially in low administrative levels (low-rank), non-resource based (RB), non-key environmental protection (KEP), midwestern and northwestern cities. And the additional mediation mechanisms demonstrate that the environmental benefits of the CTD in China are attributed to the optimization of urban spatial layout, which reduces CO₂ emissions by improving public transportation and limiting urban sprawl.

Tax Policy and Total Factor Carbon Emission Efficiency: Evidence from China’s VAT Reform

China, the world’s largest carbon emitter, urgently needs to improve its carbon emissions efficiency. This study analyzes the impact of tax policy on total factor carbon emission efficiency (TFCEE). Using the Value Added Tax (VAT) reform in China as an exogenous shock and undesirable-SBM model to measure the total factor carbon emission efficiency of 282 cities in China from 2003 to 2019, our multiple difference-in-difference (DID) estimates show that VAT reform significantly improves the TFCEE in the city level. These potential mechanisms show that VAT reform has promoted upgrading industrial structures, stimulated technological innovation, improved human capital, introduced FDI through four channels, and enhanced the TFCEE. The heterogeneity study found that VAT reform has a higher effect on promoting TFCEE in coastal and large megacities than in inland and small and medium-sized cities. This study provides a theoretical basis for policy instruments to improve energy efficiency and the environment.

The Impact of Digital Finance on Green Total Factor Energy Efficiency: Evidence at China’s City Level

The rapid development of digital finance has delivered significant benefits, such as sustainable development and economic growth. We explore the relationship between digital finance and green total factor energy efficiency (GTFEE) for the first time, filling a gap in the existing literature. This paper uses dynamic panel models to explore digital finance’s impact on GTFEE at the Chinese city-level panel data from 2011 to 2018. The results show that digital finance can significantly improve urban GTFEE, and the findings remain robust with various tests. Second, the mechanism analysis indicates that digital finance can improve GTFEE by promoting urban green technology innovation and industrial structure upgrading. Further study shows that digital finance has a better effect on the improvement of GTFEE in central and western cities, small cities and non-resource-based cities, but has no significant or small impact on GTFEE in eastern cities, large cities and resource-based cities, reflecting the inclusiveness of digital finance.