Low-carbon policy regulation and spatial effects: evidence from China

This study examines the spatial treatment effects of Low-carbon City pilot policy on PM2.5 concentrations across 277 cities in China from 2005 to 2023. Based on spatial causal inference, this study finds that this policy significantly decreases PM2.5 concentrations in regions with greater policy intensity, while the direct effects of this policy are not significant in regions with lower policy intensity. Furthermore, the implementation of this policy reduces PM2.5 concentrations in the neighbouring cities from the perspective of spatial effects while its direct effects are weaker. The implementation of Low-carbon City pilot policy diminishes PM2.5 concentrations through increasing environmental technological innovation capacity and average green asset ratio of regional firms. This study further examines the spatial attenuation effects and heterogeneous impacts arising from differentiated policy regulation intensity, indicating the transformation of the spatial pattern from mutual collaboration to a beggar-thy-neighbour situation as distance increases.