The impact of supportive policy for resource-exhausted cities on carbon emission: Evidence from China

Carbon emissions and natural resources have become the basis of geopolitical competition due to climate change and energy security in recent decades. Whether transformation policies for resource-exhausted cities can reduce carbon emissions while promoting resource conservation provides empirical evidence for the government to promote green and low-carbon development based on place-based policies. This paper is the first study to estimate the causal effects of the Resource-Exhausted City Promotion program on carbon emissions with a difference-in-differences design. We find that this supportive policy significantly leads to a reduction in carbon emissions in resource-exhausted cities, relative to other cities. The negative effect remains unchanged after a battery of robustness checks. Heterogeneous analyses suggest that this policy reduces more carbon emissions in cities with lower dependence on mining industry and eastern cities. Scale effect and technological effect might be two main influencing channels of the negative effect. Our findings add to the literature on the carbon reduction effect of place-based policies and provide empirical evidence and timely policy implications for the sustainable development of resource-exhausted cities.