Do New Energy Vehicles Really Reduce Carbon Emissions? A Quasi‐Natural Experiment From China

Jianlong Wang, Haitao Wu (), Yong Liu and Weilong Wang

Review of Development Economics, 2025, vol. 29, issue 4, 2449-2463

Abstract: Utilizing new energy vehicles (NEVs) is a crucial trend in addressing global climate concerns. Extensive research has indicated that new energy vehicles have reduced carbon emissions in the transportation sector, but neglected their burden on carbon emissions in the power sector, especially in developing countries where coal‐fired power is the primary source of electricity. Accordingly, this study explores the impact of NEV utilization on the electricity industry carbon emissions (EICE). We use the China New Energy Vehicle Promotion Application Cities Construction (NEVPA) as a quasi‐natural experiment and utilize the Difference‐in‐Differences method to investigate the impact of NEVPA on urban EICE. This study presents three innovative conclusions: (1) NEVPA promotes EICE, and this result withstands a battery of robustness estimations, including machine learning and placebo tests. (2) NEVPA's influence on EICE is more pronounced in cities with “right‐of‐way prioritization” and enhanced charging infrastructure. (3) The scale effect and natural resource dependence constitute pivotal mechanisms driving the increase in EICE due to NEVPA. This study offers strategic measures for cities to synergize the development of the NEV industry and carbon emission management, spanning renewable energy advancement and improved charging infrastructure construction.

Date: 2025
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