Can Low-Carbon City Pilot Policies Promote Green Total Factor Energy Efficiency in China?

Songyuan Liu, Ziyu Wu (), Mei Wang and Lingfeng Tan
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Songyuan Liu: State Grid Economic and Technological Research Institute, Co., Ltd., Beijing 102209, China
Ziyu Wu: School of Business, Professional Degree Education Center, Xuhui Campus, East China University of Science and Technology, Shanghai 200030, China
Mei Wang: College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 211106, China
Lingfeng Tan: State Grid Economic and Technological Research Institute, Co., Ltd., Beijing 102209, China

Sustainability, 2025, vol. 17, issue 18, 1-23

Abstract: This study evaluates the causal impact and mechanisms of China’s Low-Carbon City Pilot Policy (LCCPP) on urban Green Total Factor Energy Efficiency (GTFEE) by using a multi-period Difference-in-Differences (DID) model with a comprehensive panel dataset of Chinese cities from 2007 to 2022. We also conduct a series of robustness checks, including event studies and Propensity Score Matching with Difference-in-Differences (PSM-DID), to ensure the reliability of our findings. The results show that the LCCPP has a significant and robust positive effect on urban GTFEE. Furthermore, our mechanism analysis reveals that the policy primarily enhances GTFEE through two key channels: promoting green innovation and accelerating industrial structure upgrading. This study provides important policy implications, suggesting that the LCCPP is an effective tool for green development and that policymakers should focus on supporting green technology and industrial transformation to maximize the policy’s benefits.

Keywords: low-carbon city pilot policy; green total factor energy efficiency; difference-in-differences; green innovation; industrial structure upgrading (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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