Evaluation for the effect of low-carbon city pilot policy: evidence from industry in China

The investigation of the implementation effect of the low-carbon city pilot (LCCP) policy in promoting industrial low-carbon development is important for economic growth and carbon reduction in China. This paper takes the industry sector as an independent investigation object, and aims to examine the effectiveness of the policy in improving industrial low-carbon development. The industrial total factor carbon emission efficiency index (ITFCEE) is constructed to measure the level of industrial low-carbon development by the global frontier directional distance function. From the perspective of the multiple participants of the policy, we analyze the mechanisms of the policy, and construct the time-varying difference-in-difference model to test how LCCP policy impacts the ITFCEE. We conclude that (1) LCCP policy improves significantly the ITFCEE. (2) Heterogeneity analysis results show that the positive influence of LCCP policy is significant in cities with high industrial carbon emission intensity, high industrial structure upgrading, and high government expenditure. (3) The result of the mechanism analysis is that LCCP policy can benefit the ITFCEE by promoting enterprise green technology innovation, public environment concern, government technology support, and administrative regulation.