IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v390y2025ics0306261925005021.html
   My bibliography  Save this article

Every coin has two sides: Dual effects of energy transition on regional sustainable development—A quasi-natural experiment of the New Energy Demonstration City Pilot Policy

Author

Listed:
  • Lee, Chenyang
  • Ogata, Seiichi

Abstract

Energy transition policies are crucial in restructuring energy supply and demand, mitigating global warming, and fostering regional sustainable development. As a pivotal pilot initiative in China's energy transition, the New Energy Demonstration City Pilot (NEDC) policy has garnered substantial interest from industry and academic circles. This study employs panel data from 1749 counties in China spanning 2010–2021, treating NEDC policies as a quasi-natural experiment and utilizing the TWFE-DID model to analyze their impact on regional sustainable development. This study further investigates the policy's underlying mechanisms for promoting regional sustainable development and examines its negative effects from the perspectives of geographical location, and regional type. The study finds that: (1) The NEDC policy significantly enhances the sustainable development level of counties,with robust results from various tests; (2) The NEDC policy advances sustainable development in pilot areas by fostering technological innovation, enhancing energy efficiency, optimizing the energy structure and land use structure; (3) The NEDC policy has two primary negative effects: first, it may induce the “pollution haven effect”, which hinders the sustainable development of neighboring regions; second, it may disrupt the industrial transformation of Growing resource-based cities, further exacerbating urban-rural development inequalities. The results of this study suggest that when formulating and implementing energy transition policies, the government should carefully consider regional disparities and prioritize social equity to mitigate the potential negative social impacts associated with these policies.

Suggested Citation

  • Lee, Chenyang & Ogata, Seiichi, 2025. "Every coin has two sides: Dual effects of energy transition on regional sustainable development—A quasi-natural experiment of the New Energy Demonstration City Pilot Policy," Applied Energy, Elsevier, vol. 390(C).
    • Handle: RePEc:eee:appene:v:390:y:2025:i:c:s0306261925005021
    DOI: 10.1016/j.apenergy.2025.125772
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261925005021
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2025.125772?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Shao, Jun & Wang, Lianghu, 2023. "Can new-type urbanization improve the green total factor energy efficiency? Evidence from China," Energy, Elsevier, vol. 262(PB).
    2. He, Xiaoping & Yu, Yuxuan & Jiang, Shuo, 2023. "City centrality, population density and energy efficiency," Energy Economics, Elsevier, vol. 117(C).
    3. Cheng, Zhonghua & Yu, Xuejin & Zhang, Yi, 2023. "Is the construction of new energy demonstration cities conducive to improvements in energy efficiency?," Energy, Elsevier, vol. 263(PA).
    4. Ashesh Rambachan & Jonathan Roth, 2023. "A More Credible Approach to Parallel Trends," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(5), pages 2555-2591.
    5. Barbara Biasi & Heather Sarsons, 2022. "Flexible Wages, Bargaining, and the Gender Gap," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(1), pages 215-266.
    6. Su, Yi & Fan, Qi-ming, 2022. "Renewable energy technology innovation, industrial structure upgrading and green development from the perspective of China's provinces," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    7. Lee, Chien-Chiang & Feng, Yi & Peng, Diyun, 2022. "A green path towards sustainable development: The impact of low-carbon city pilot on energy transition," Energy Economics, Elsevier, vol. 115(C).
    8. Ren, Siyu & Hao, Yu & Xu, Lu & Wu, Haitao & Ba, Ning, 2021. "Digitalization and energy: How does internet development affect China's energy consumption?," Energy Economics, Elsevier, vol. 98(C).
    9. Matheus B. Frare & Ana P. C. Clauberg & Simone Sehnem & Lucila M. S. Campos & Juliano Spuldaro, 2020. "Toward a sustainable development indicators system for small municipalities," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(5), pages 1148-1167, September.
    10. He, Yafen & Xie, Hualin, 2019. "Exploring the spatiotemporal changes of ecological carrying capacity for regional sustainable development based on GIS: A case study of Nanchang City," Technological Forecasting and Social Change, Elsevier, vol. 148(C).
    11. Meng, Ting & Hsu, David & Han, Albert, 2017. "Estimating energy savings from benchmarking policies in New York City," Energy, Elsevier, vol. 133(C), pages 415-423.
    12. Wang, Xiaoling & Zhang, Tianyue & Nathwani, Jatin & Yang, Fangming & Shao, Qinglong, 2022. "Environmental regulation, technology innovation, and low carbon development: Revisiting the EKC Hypothesis, Porter Hypothesis, and Jevons’ Paradox in China's iron & steel industry," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    13. Onafowora, Olugbenga A. & Owoye, Oluwole, 2014. "Bounds testing approach to analysis of the environment Kuznets curve hypothesis," Energy Economics, Elsevier, vol. 44(C), pages 47-62.
    14. Singhania, Monica & Saini, Neha, 2021. "Demystifying pollution haven hypothesis: Role of FDI," Journal of Business Research, Elsevier, vol. 123(C), pages 516-528.
    15. Liu, Zhengguang & Guo, Zhiling & Chen, Qi & Song, Chenchen & Shang, Wenlong & Yuan, Meng & Zhang, Haoran, 2023. "A review of data-driven smart building-integrated photovoltaic systems: Challenges and objectives," Energy, Elsevier, vol. 263(PE).
    16. Hallegatte, Stephane & Hourcade, Jean-Charles & Dumas, Patrice, 2007. "Why economic dynamics matter in assessing climate change damages: Illustration on extreme events," Ecological Economics, Elsevier, vol. 62(2), pages 330-340, April.
    17. Yang, Jiayu & Wang, Jianlong & Wang, Weilong & Wu, Haitao, 2024. "Exploring the path to promote energy revolution: Assessing the impact of new energy demonstration city construction on urban energy transition in China," Renewable Energy, Elsevier, vol. 236(C).
    18. Fisher-Vanden, Karen & Jefferson, Gary H. & Jingkui, Ma & Jianyi, Xu, 2006. "Technology development and energy productivity in China," Energy Economics, Elsevier, vol. 28(5-6), pages 690-705, November.
    19. Verbong, Geert & Geels, Frank, 2007. "The ongoing energy transition: Lessons from a socio-technical, multi-level analysis of the Dutch electricity system (1960-2004)," Energy Policy, Elsevier, vol. 35(2), pages 1025-1037, February.
    20. Song, Yang & Pang, Xiaoqian & Zhang, Zhiyuan & Sahut, Jean-Michel, 2024. "Can the new energy demonstration city policy promote corporate green innovation capability?," Energy Economics, Elsevier, vol. 136(C).
    21. Romualdas Juknys & Genovaitė Liobikienė & Renata Dagiliūtė, 2017. "Sustainability of Economic Growth and Convergence in Regions of Different Developmental Stages," Sustainable Development, John Wiley & Sons, Ltd., vol. 25(4), pages 276-287, July.
    22. Ozturk, Murat & Yuksel, Yunus Emre, 2016. "Energy structure of Turkey for sustainable development," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 1259-1272.
    23. Yang, Bin & Wu, Qiong & Sharif, Arshian & Uddin, Gazi Salah, 2023. "Non-linear impact of natural resources, green financing, and energy transition on sustainable environment: A way out for common prosperity in NORDIC countries," Resources Policy, Elsevier, vol. 83(C).
    24. Fan, Xiao-chao & Wang, Wei-qing & Shi, Rui-jing & Cheng, Zhi-jiang, 2017. "Hybrid pluripotent coupling system with wind and photovoltaic-hydrogen energy storage and the coal chemical industry in Hami, Xinjiang," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 950-960.
    25. Achim Ahrens & Christian B. Hansen & Mark E. Schaffer & Thomas Wiemann, 2024. "ddml: Double/debiased machine learning in Stata," Stata Journal, StataCorp LLC, vol. 24(1), pages 3-45, March.
    26. Sabrina Krank & Holger Wallbaum & Adrienne Grêt‐Regamey, 2013. "Perceived contribution of indicator systems to sustainable development in developing countries," Sustainable Development, John Wiley & Sons, Ltd., vol. 21(1), pages 18-29, January.
    27. Gao, Kang & Yuan, Yijun, 2021. "The effect of innovation-driven development on pollution reduction: Empirical evidence from a quasi-natural experiment in China," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    28. Pushpananthan, Gouthanan & Elmquist, Maria, 2022. "Joining forces to create value: The emergence of an innovation ecosystem," Technovation, Elsevier, vol. 115(C).
    29. Shen, Yu & Sun, Wenkai, 2023. "The effect of low-carbon city pilot on energy consumption behavior: Evidence from China," Energy Economics, Elsevier, vol. 127(PA).
    30. Ng, Artie W. & Nathwani, Jatin, 2010. "Sustainable energy policy for Asia: Mitigating systemic hurdles in a highly dense city," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(3), pages 1118-1123, April.
    31. Cucchiella, Federica & D’Adamo, Idiano & Gastaldi, Massimo & Koh, SC Lenny & Rosa, Paolo, 2017. "A comparison of environmental and energetic performance of European countries: A sustainability index," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 401-413.
    32. Cheng, Zhonghua & Wang, Lan, 2023. "Can new urbanization improve urban total-factor energy efficiency in China?," Energy, Elsevier, vol. 266(C).
    33. Gao, Kang & Yuan, Yijun, 2022. "Government intervention, spillover effect and urban innovation performance: Empirical evidence from national innovative city pilot policy in China," Technology in Society, Elsevier, vol. 70(C).
    34. Zhu, Lin & Luo, Jian & Dong, Qingli & Zhao, Yang & Wang, Yunyue & Wang, Yong, 2021. "Green technology innovation efficiency of energy-intensive industries in China from the perspective of shared resources: Dynamic change and improvement path," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    35. Radulovic, Dusko & Skok, Srdjan & Kirincic, Vedran, 2011. "Energy efficiency public lighting management in the cities," Energy, Elsevier, vol. 36(4), pages 1908-1915.
    36. Shahtahmassebi, Amir Reza & Wu, Chun & Blackburn, George Alan & Zheng, Qing & Huang, Lingyan & Shortridge, Ashton & Shahtahmassebi, Golnaz & Jiang, Ruowei & He, Shan & Wang, Ke & Lin, Yue & Clarke, Ke, 2018. "How do modern transportation projects impact on development of impervious surfaces via new urban area and urban intensification? Evidence from Hangzhou Bay Bridge, China," Land Use Policy, Elsevier, vol. 77(C), pages 479-497.
    37. Roemer, Kelli F. & Haggerty, Julia H., 2021. "Coal communities and the U.S. energy transition: A policy corridors assessment," Energy Policy, Elsevier, vol. 151(C).
    38. Shang, Hua & Jiang, Li & Pan, Xianyou & Pan, Xiongfeng, 2022. "Green technology innovation spillover effect and urban eco-efficiency convergence: Evidence from Chinese cities," Energy Economics, Elsevier, vol. 114(C).
    39. Jochen Markard, 2018. "The next phase of the energy transition and its implications for research and policy," Nature Energy, Nature, vol. 3(8), pages 628-633, August.
    40. Gao, Da & Li, Ge & Yu, Jiyu, 2022. "Does digitization improve green total factor energy efficiency? Evidence from Chinese 213 cities," Energy, Elsevier, vol. 247(C).
    41. Sendhil Mullainathan & Jann Spiess, 2017. "Machine Learning: An Applied Econometric Approach," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 87-106, Spring.
    42. Ahn, Kwangwon & Chu, Zhuang & Lee, Daeyong, 2021. "Effects of renewable energy use in the energy mix on social welfare," Energy Economics, Elsevier, vol. 96(C).
    43. Halhoul Merabet, Ghezlane & Essaaidi, Mohamed & Ben Haddou, Mohamed & Qolomany, Basheer & Qadir, Junaid & Anan, Muhammad & Al-Fuqaha, Ala & Abid, Mohamed Riduan & Benhaddou, Driss, 2021. "Intelligent building control systems for thermal comfort and energy-efficiency: A systematic review of artificial intelligence-assisted techniques," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    44. Nadia S. Ouedraogo, 2020. "Transition pathways for North Africa to meet its (intended) nationally determined contributions ((I)NDCs) under the Paris Agreement: a model-based assessment," Climate Policy, Taylor & Francis Journals, vol. 20(1), pages 71-94, January.
    45. Liu, Hongwei & Zhang, Aodi & Wu, Jie, 2023. "Can industrial transfer improve urban innovation efficiency?," Socio-Economic Planning Sciences, Elsevier, vol. 90(C).
    46. Leach, Gerald, 1992. "The energy transition," Energy Policy, Elsevier, vol. 20(2), pages 116-123, February.
    47. Hu, Wei & Fan, Yuemin, 2020. "City size and energy conservation: Do large cities in China consume more energy?," Energy Economics, Elsevier, vol. 92(C).
    48. Wu, Haitao & Hao, Yu & Ren, Siyu & Yang, Xiaodong & Xie, Guo, 2021. "Does internet development improve green total factor energy efficiency? Evidence from China," Energy Policy, Elsevier, vol. 153(C).
    49. Michael E. Porter & Claas van der Linde, 1995. "Toward a New Conception of the Environment-Competitiveness Relationship," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 97-118, Fall.
    50. Jonathan Roth, 2022. "Pretest with Caution: Event-Study Estimates after Testing for Parallel Trends," American Economic Review: Insights, American Economic Association, vol. 4(3), pages 305-322, September.
    51. Yang, Xiaolei & He, Lingyun & Xia, Yufei & Chen, Yufeng, 2019. "Effect of government subsidies on renewable energy investments: The threshold effect," Energy Policy, Elsevier, vol. 132(C), pages 156-166.
    52. Han, Feng & Xie, Rui & Fang, Jiayu, 2018. "Urban agglomeration economies and industrial energy efficiency," Energy, Elsevier, vol. 162(C), pages 45-59.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zixuan Yang & Huang Yu & Jingqiu Zhang, 2025. "New Energy Policies and Informal Cultural Norms Promoting Carbon Equity in Chinese Cities: Synergistic Effects and Regional Heterogeneity," Energies, MDPI, vol. 18(10), pages 1-23, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Erkul, Abdullah & Türköz, Kumru, 2024. "Green growth governance and total factor energy efficiency: Economic growth constraint and policy implementation in OECD countries," Renewable Energy, Elsevier, vol. 235(C).
    2. Li, Zhiyi & Hu, Boqiang & Bao, Yifei & Wang, Yifei, 2025. "Supply chain digitalization, green technology innovation and corporate energy efficiency," Energy Economics, Elsevier, vol. 142(C).
    3. Senhua Huang & Lingming Chen, 2023. "The Impact of the Digital Economy on the Urban Total-Factor Energy Efficiency: Evidence from 275 Cities in China," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    4. Chen, Jinrui & Zhang, Yichang, 2025. "Substantive change or strategic response? Digital industrial convergence policy and urban green innovation," Innovation and Green Development, Elsevier, vol. 4(1).
    5. Wang, Ke-Liang & Sun, Ting-Ting & Xu, Ru-Yu & Miao, Zhuang & Cheng, Yun-He, 2022. "How does internet development promote urban green innovation efficiency? Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    6. Guo, Bingnan & Hu, Peiji & Lin, Ji, 2024. "The effect of digital infrastructure development on enterprise green transformation," International Review of Financial Analysis, Elsevier, vol. 92(C).
    7. Peng, Hui & Lu, Yaobin & Wang, Qunwei, 2023. "How does heterogeneous industrial agglomeration affect the total factor energy efficiency of China's digital economy," Energy, Elsevier, vol. 268(C).
    8. Boungou, Whelsy & Dufau, Bastien, 2024. "EU ETS phase IV and Industrial performance," Economics Letters, Elsevier, vol. 236(C).
    9. Fang, Guochang & Chen, Gang & Yang, Kun & Yin, Weijun & Tian, Lixin, 2024. "How does green fiscal expenditure promote green total factor energy efficiency? — Evidence from Chinese 254 cities," Applied Energy, Elsevier, vol. 353(PA).
    10. Ying Peng & Xinyue Wang & Weilong Gao, 2025. "The Impact of Data Element Marketization on Green Total Factor Energy Efficiency: Empirical Evidence from China," Sustainability, MDPI, vol. 17(9), pages 1-25, May.
    11. Xie, Ronghui & Teo, Thompson S.H., 2022. "Green technology innovation, environmental externality, and the cleaner upgrading of industrial structure in China — Considering the moderating effect of environmental regulation," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    12. Yang, Jiayu & Wang, Jianlong & Wang, Weilong & Wu, Haitao, 2024. "Exploring the path to promote energy revolution: Assessing the impact of new energy demonstration city construction on urban energy transition in China," Renewable Energy, Elsevier, vol. 236(C).
    13. Ma, Dan & Tang, Jiaqi & Jiang, Xuemei, 2023. "Effects of digital global value chain participation on CO2 emissions embodied in digital exports: New evidence from PSTR approach," Energy Economics, Elsevier, vol. 126(C).
    14. Mao Chai & Chao Wu & Yusen Luo & Claudia Nyarko Mensah, 2025. "New Energy Demonstration City Policy and Corporate Green Innovation: From the Perspective of Industrial and Regional Spillover Effect," Sustainability, MDPI, vol. 17(7), pages 1-23, April.
    15. Ya Wu & Yin Liu & Minglong Zhang, 2023. "How Does Digital Finance Affect Energy Efficiency?—Characteristics, Mechanisms, and Spatial Effects," Sustainability, MDPI, vol. 15(9), pages 1-24, April.
    16. Shaoyan Yang & Duodong Ding & Churen Sun, 2022. "Does Innovative City Policy Improve Green Total Factor Energy Efficiency? Evidence from China," Sustainability, MDPI, vol. 14(19), pages 1-30, October.
    17. Gai, Zhiqiang & Guo, Yunxia & Hao, Yu, 2022. "Can internet development help break the resource curse? Evidence from China," Resources Policy, Elsevier, vol. 75(C).
    18. Li, Haichao & Su, Yuqi & Ding, Chante Jian & Tian, Gary Gang & Wu, Zhan, 2024. "Unveiling the green innovation paradox: Exploring the impact of carbon emission reduction on corporate green technology innovation," Technological Forecasting and Social Change, Elsevier, vol. 207(C).
    19. Xu, Ru-Yu & Wang, Ke-Liang & Miao, Zhuang, 2024. "The impact of digital technology innovation on green total-factor energy efficiency in China: Does economic development matter?," Energy Policy, Elsevier, vol. 194(C).
    20. Zhuoxi Yu & Shan Liu & Zhichuan Zhu, 2022. "Has the Digital Economy Reduced Carbon Emissions?: Analysis Based on Panel Data of 278 Cities in China," IJERPH, MDPI, vol. 19(18), pages 1-18, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:390:y:2025:i:c:s0306261925005021. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.