The impact of low-carbon city pilot policy on green total-factor productivity in China's cities

Abstract

Whether the low-carbon city construction can coordinate urban economy and environment has attracted increasing attention in recent years. In this study, the impact of low-carbon city pilot (LCCP) policy on urban green total-factor productivity is systematically examined theoretically and empirically. Specifically, the biennial Malmquist-Luenberger (BML) index is adopted to measure urban green productivity. Then, propensity score matching-difference-in-differences (PSM-DID) and spatial DID model are used to quantitatively identify the local and spatial spillover effect of the LCCP policy on urban green productivity during 2004-2018 in China. The results show that (1) The LCCP policy can significantly promote urban green productivity, as confirmed through a series of robustness tests. (2) For transmission mechanism, the LCCP policy can enhance urban green productivity through energy consumption reduction and technological innovation but not through industrial structure optimization. (3) With regard to heterogeneity, cities with better transportation infrastructure, stricter environmental regulation and higher urbanization level, as well as non-resource-based cities have more significantly positive effects of the LCCP policy on urban green productivity. (4) The LCCP policy mainly relies on technological progress rather than technical efficiency improvement to drive urban green productivity. (5) The LCCP policy's effect on urban green productivity has significant positive spatial spillover feature, which can significantly promote green productivity in both pilot cities and their neighboring cities. Our findings can provide valuable insights for low-carbon city construction to promote urban sustainable development in China.

Keywords: Difference-in-differences; Green total-factor productivity; Heterogeneity; The low-carbon city pilot policy.