The Impact of Carbon Peak Pilot Policy on Air Quality: Evidence from China

Against the backdrop of China’s carbon-peaking and carbon-neutrality goals and its initiative to build a Beautiful China, direct causal evidence remains limited on whether the carbon-peaking pilot policy improves urban air quality and through which channels it operates. This study uses monthly data for 282 Chinese cities from January 2020 to May 2026. Cities included in the first batch of carbon-peaking pilots constitute the treatment group. We evaluate the policy using a two-way fixed-effects difference-in-differences (DID) model. The baseline estimates show that, after the policy was implemented, the average AQI in pilot cities decreased by approximately 1.429 points, while PM2.5 concentrations fell by approximately 1.018 μg/m3. These findings suggest that the policy improved urban air quality. The mechanism analysis identifies the entry of newly registered new-energy enterprises and green technological innovation as potential transmission channels. The heterogeneity analysis further shows that the policy effect was more pronounced in northern cities and in cities with a lower population density. Overall, the findings indicate that the carbon-peaking pilot policy can promote coordinated pollution and carbon reduction. Policy implementation should therefore be accompanied by stronger joint assessments of carbon reduction and air quality. Governance resources should be allocated in light of city-specific characteristics, while the development of the new-energy industry and the application of green technologies should be supported.