Can place-based policy reduce carbon emissions? Evidence from industrial transformation and upgrading exemplary zone in China

The effect of the place-based policies on sustainable development has received substantial attention in economic research. In China, the industrial transformation and upgrading exemplary zone policy is a prominent example of such policies, as it targets old industrial and resource-based cities. The paper provides an early assessment of the policy's capability to reduce carbon emissions. Specifically, we use data from old industrial and resource-based cities for the period of 2012-2019 and apply the difference-in-differences method to examine the policy's influence on total carbon emissions and intensity. The results show that the policy can effectively reduce carbon emissions through reducing energy consumption, promoting urban green innovation and tertiary industry agglomeration. Compared to resource-based cities, cities with a low level of economic development and central, western cities, this impact is more notable in old industrial cities, cities with a high level of economic development and eastern cities. Additional analysis reveals that the policy has beneficial spatial radiation impacts on the nearby cities as well. In the meanwhile, the strategy may have a synergy effect on reducing carbon emissions and pollution. The results of this study may have an impact on how nations implement place-based policies and reduce carbon emissions.