Impact of energy saving and emission reduction policy on urban sustainable development: Empirical evidence from China

• Published in: Applied energy Vol. 239; pp. 12 - 22
• Main Authors: Lin, Boqiang, Zhu, Junpeng
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.04.2019
• Subjects: China; cities; Difference-in-differences method; Eco-efficiency; emissions; energy conservation; fiscal policy; Non-directional distance function; Policy evaluation; pollution control; sustainable development; China; Policy evaluation; Difference-in-differences method; Eco-efficiency; Non-directional distance function
• ISSN: 0306-2619; 1872-9118
• DOI: 10.1016/j.apenergy.2019.01.166

•An energy saving and emission reduction policy is analyzed in this paper.•This policy has a significant and positive effect on sustainable development.•Policy effect emerges three years later after the implementation of this policy.•Long-term mechanism for energy saving and emissions reduction should be established. “National Comprehensive Demonstration of Energy Saving and Emission Reduction Fiscal Policy” (ESER policy) is an important measure for urban pollution control and energy conservation in China. A reasonable evaluation of this policy can provide a reference to further promote energy saving and emissions reduction work. Using the panel data of 114 Chinese cities, this paper explores the effect of ESER policy on urban sustainable development. We first construct a sustainable indicator, which is defined as eco-efficiency, by using the non-directional distance function method. Then we evaluate the effect of ESER policy on eco-efficiency by adopting the Difference-in-differences method. The conclusions based on the findings include: (1) The eco-efficiency of Chinese cities has been effectively improved during the study period. (2) The baseline estimate reveals that the ESER policy has a positive and statistically significant effect on eco-efficiency, while the event study corroborates that ESER policy is ineffective in the short term, but the policy effect emerges three years later after the implementation of ESER policy. (3) A series of identification tests prove that the results are robust and credible. Our findings contribute to the understanding of energy saving and emissions reduction policies.