The Impact of the Circular Economy Pilot Policy on Carbon Emissions in Chinese Cities and Its Underlying Mechanisms

Shanshan Li () and Zhengjun Hu
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Shanshan Li: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China
Zhengjun Hu: School of Economics, Huazhong University of Science and Technology, Wuhan 430074, China

Sustainability, 2024, vol. 16, issue 17, 1-25

Abstract: The development of the circular economy is an important way for China to achieve its carbon peak and carbon neutrality goals on schedule. In this paper, we use the construction of circular economy demonstration cities as a quasi-natural experiment to systematically evaluate the carbon reduction effect of the circular economy pilot policy using the multi-period Differences-in-Differences (DID) model and Spatial-Differences-in-Differences (Spatial-DID) model. The research findings indicate that the circular economy pilot policy may effectively restrain the intensity of carbon emissions and the volume of carbon emissions, primarily driving carbon reduction in resource-based cities, old industrial base cities, and cities in the central regions, rather than universally exerting a significant impact on energy conservation and carbon reduction in all cities. Government investment in technology and the improvement of factor allocation structure play a mediating role in the carbon reduction effect of the circular economy pilot policy, while the intensity of public management plays a moderating role. When considering the externalities of urban networks, it becomes evident that the policy exhibits a notable spatial spillover effect. This not only significantly propels local efforts to reduce carbon emissions but also exerts a “demonstration effect” on the surrounding areas. The spillover effect on carbon emissions volume surpasses that on carbon emission intensity. This study offers empirical evidence for the ongoing promotion of the circular economy pilot policy nationwide, facilitating the achievement of cities’ dual carbon goals.

Keywords: circular economy demonstration cities; carbon emissions; carbon emission intensity; multi-period DID model; spatial-DID model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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