Exploration on the impact of low carbon pilot policies on rural industrial development under the background of “Dual-carbon” goals

Siqi Lu, Siyuan Huang and Zilong Zhao

International Review of Economics & Finance, 2025, vol. 103, issue C

Abstract: Initiated in 2010 and implemented in three batches across selected provinces and cities, the low-carbon policy is a pivotal initiative in China dedicated to actualizing the “Dual-carbon” goal by cutting down upon greenhouse gas emissions, lessening industrial carbon output, and pushing ahead low-carbon development in urban and rural economies. This study explores how these strategies affect the efficiency of rural industrial development in pilot areas, which is directly correlated with rural revitalization and common prosperity. It puts forward several hypotheses with regard to the association between low-carbon pilot policies and TFP in rural industries, using panel data from 1674 county-level cities in China from 2001 to 2022. Although effects vary spatially on account of geographical and economic factors, the research deems that these policies noticeably enhance overall rural industry TFP, which can be validated when we treat low-carbon pilot policies as a quasi-natural experiment and employing a multi-period double difference method. The policies have a notable and positive impact in regions south of the Qinling Huaihe River, east of the Hu Huanyong line, and in resource-based western areas, highlighting the synergy between policy adaptability and regional endowments. Mechanism analysis reveals that inter-provincial policy collaboration enhances effectiveness through a “provincial-prefecture level” governance mechanism, which underscores the importance of multi-level policy linkage for improving rural green transformation efficiency. Nonetheless, the influence of low-carbon agricultural initiatives and carbon peak measures—both as structural components within certain regional low-carbon pilot policy implementations—demonstrates temporal variability, with the latter showing short-term inhistory effects on rural industry TFP, highlighting tensions between strict carbon constraints and rural economic growth objectives.

Keywords: Low-carbon pilot policies; TFP of rural industries; Double difference method (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025006136

DOI: 10.1016/j.iref.2025.104450

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