China’s Low-Carbon City Pilot Policy, Eco-Efficiency, and Energy Consumption: Study Based on Period-by-Period PSM-DID Model

Xiao Na Li () and Hsing Hung Chen
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Xiao Na Li: School of Business, Macau University of Science and Technology, Taipa, Macau
Hsing Hung Chen: School of Business, Macau University of Science and Technology, Taipa, Macau

Energies, 2025, vol. 18, issue 15, 1-25

Abstract: The sustainable development of Chinese cities is of long-term significance. Multiple environmental regulatory instruments aim to promote the parallel advancement of environmental conservation and economic growth. This study examines three batches of low-carbon city pilot (LCCP) programs, employing eco-efficiency as the outcome variable. Using conventional difference-in-differences (DID) models, time-varying DID models, and period-by-period propensity score matching DID (PSM-DID) models with city and time fixed effects, we investigate the comprehensive impact of pilot policies on both economic and environmental performance. Eco-efficiency, measured through the Data Envelopment Analysis (DEA) model, exhibits a strong correlation with energy consumption patterns, as carbon emissions and air pollutants predominantly originate from non-clean energy utilization. The analysis reveals that LCCP policies significantly enhance eco-efficiency. These findings demonstrate robustness across placebo tests, endogeneity treatments, and alternative outcome variable specifications. The first and third LCCP batches significantly improve eco-efficiency, whereas the second batch demonstrates no statistically significant effect. Significant impacts emerge in regions where cities hold pilot status while provinces do not; conversely, regions where both cities and provinces participate in pilot programs show no significant effects. Finally, from an energy consumption perspective, policy recommendations are proposed to further enhance eco-efficiency through regulatory instruments.

Keywords: low-carbon city; eco-efficiency; energy consumption; data envelopment analysis (DEA); time-varying DID; period-by-period PSM-DID (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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