Does low-carbon pilot city program reduce carbon intensity? Evidence from Chinese cities

• Published in: Research in international business and finance 2021-12, Vol.58, p.101450, Article 101450
• Main Authors: Feng, Tong, Lin, Zhongguo, Du, Huibin, Qiu, Yueming, Zuo, Jian
• Format: Article
• Language: English
• Subjects: Carbon intensity; Chinese cities; Difference-in-differences; Low-carbon pilot city
• ISSN: 0275-5319; 1878-3384
• DOI: 10.1016/j.ribaf.2021.101450

The yearly dynamic effects of the LCPC programme on carbon intensity. [Display omitted] Low-carbon pilot city (LCPC) programs have been implemented in China to facilitate low carbon production and consumption for combating climate change. The two rounds of low-carbon pilot regions covered six provinces and 36 cities in China. Governments have invested considerable funds and resources to develop LCPCs. Based on panel data from 49 cities for 2005–2018, we employ a matched difference-in-differences approach to explore the effects of the LCPC program on carbon intensity at the city level. Results show that in contrast to the program’s goals and expectations, LCPCs significantly increased carbon intensity in both rounds by 15 %–20 % compared with control groups. The growth effect on carbon intensity gradually weakened in the third year following the adoption of the LCPC program. An influential factor analysis indicates that the effects are stronger in eastern coastal cities with improved economic conditions and a reduced proportion of secondary industry production. A series of robustness and placebo tests indicate that the results are robust. We identify possible reasons for this unexpected result, such as preliminary infrastructure construction and development of economic circles. These measures show that the process of decarbonization may result in higher carbon intensity in the short term.