Carbon Abatement Effect of Low-Carbon City Pilot Policy: Insights from a Time-Varying DID Model

The low-carbon city pilot (LCCP) policy constitutes a crucial element in China's endeavors to attain its carbon peak target. Thoroughly analyzing the carbon abatement effects and mechanisms of the LCCP policy is essential for supporting China's goals of achieving low-carbon sustainability. We use panel data from 1997 to 2019, covering 249 Chinese cities, for a quasi-natural experiment. This study assesses the effect of the LCCP project on urban carbon emission intensity (CEI) using a difference-in-difference (DID) model. Furthermore, the article conducts analyses on policy coordination effects, impact mechanisms, and spatial spillover effects. Our research findings indicate that the LCCP policy substantially decreases urban CEI, a result that withstands a battery of robustness tests. The carbon abatement effect of LCCP policies is dynamic and typically endures for three years. Subsequent investigations unveil a cooperative impact between the LCCP policy and the carbon trading pilot policy. The decrease of urban CEI under the LCCP policy is primarily attributed to command and market tools, although the efficacy of voluntary tools remains unrealized. From the standpoint of adjacent nonpilot cities, our conclusions do not endorse the presence of spatial spillover effect for the LCCP project. The insights derived from our findings offer crucial guidance for policymakers exploring low-carbon models and pathways.