Research on the incentive effect of the policy combination of carbon-reduction pilot cities

• Published in: International review of economics & finance 2024-03, Vol.91, p.456-475
• Main Authors: Zhou, Bihua, Huang, Yun, Zhao, Yihang
• Format: Article
• Language: English
• Subjects: Carbon reduction; Incentive effect; Pilot cities; Policy combination
• ISSN: 1059-0560; 1873-8036
• DOI: 10.1016/j.iref.2024.01.018

This paper investigates the impact of policy combinations on the process of urban carbon reduction using panel data from 284 pilot cities in China. We analyze the incentive process of pilot city policies under three dimensions of the administrative subcontract and verify the impact of different policy combinations on carbon emissions. Our findings suggest that the policy combinations of dual pilot cities significantly reduced carbon intensity and had a complementary effect. In heterogeneity analysis, the policy combinations of dual pilot cities significantly reduced carbon intensity in central and western cities but did not affect eastern cities. We also find that the policy path dependence formed by becoming a “low-carbon city” first and then a “demonstration city” had a better carbon reduction incentive effect than becoming a “demonstration city” first and then a “low-carbon city”. The study results show that the order of policy combinations will bring different policy effects, and paying attention to the incentive mechanism differences of different policy combinations will help improve policy implementation effects. Our research highlights the importance of policy combinations in promoting urban carbon reduction and provides policy implications for governments to design effective carbon reduction policies.