Low-carbon city pilot and carbon emission efficiency: Quasi-experimental evidence from China

• Published in: Energy economics Vol. 96; p. 105125
• Main Authors: Yu, Yantuan, Zhang, Ning
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier B.V 01.04.2021; Elsevier Science Ltd
• Subjects: Air pollution; Carbon; Carbon dioxide; Carbon dioxide emissions; Carbon emission efficiency; Cities; Data envelopment analysis; DID; Emissions; Empirical analysis; Energy economics; Environmental policy; Impact analysis; Low-carbon city pilot; Nonconvex metafrontier; Quasi-experimental methods; Statistical analysis; China; Q32; Q43; Q56; Low-carbon city pilot; Carbon emission efficiency; Nonconvex metafrontier; DID; C61; Data envelopment analysis
• ISSN: 0140-9883; 1873-6181
• DOI: 10.1016/j.eneco.2021.105125

This paper identifies the causal effect of low-carbon city pilot (LCCP) policy on carbon emission efficiency (CEE). Specifically, we first develop a general nonconvex metafrontier data envelopment analysis model to calculate CEE. We also provide a quasi-experimental evidence using a unique dataset of 251 cities in China during the years 2003 to 2018. Specifically, difference-in-differences (DID) and spatial DID (SDID) estimators are used as the main empirical strategy. We find that the LCCP policy improved CEE by 1.7% which are both economically and statistically significant. Further, its impact on neighbor untreated cities is about 64% of that on the treated cities. Scenario analysis documents that the average carbon dioxide emissions should be mitigated by approximately 8.37 million tons with a CEE increase of 1%, 8.84 million tons with a 2% increase, and 9.31 million tons with a 3% increase. Our findings also indicate that a 1% increase in years relative to a city's carbon dioxide emissions peak year commitment associates with a 1.3% increase in CEE. •A nonconvex metafrontier data envelopment analysis model is developed to calculate carbon emission efficiency.•The causal relationship between low-carbon city pilot policy and carbon emission efficiency is identified.•The PSM-DID results confirm that the LCCP policy improved CEE by a significant 1.7%.•The impact of LCCP policy on neighbor untreated cities is about 64% of that on the treated cities.