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The effect of low-carbon city construction on PM2.5: Evidence from China

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  • Ge, Liming
  • Zheng, Heyun
  • Lv, Kangjuan
  • Huang, Han
  • Tan-Soo, Jie-Sheng
  • Feng, Chen

Abstract

Air pollution poses significant threats to human health and social welfare, severely impeding sustainable urban development. The low-carbon city pilot (LCCP) policy, designed to control greenhouse gas emissions, may also affect PM2.5. We empirically assess the effect of LCCP policy on PM2.5 by deploying a difference-in-differences strategy. Our findings indicate that, on average, LCCP policy reduces PM2.5 by 2.27 % in pilot cities compared to non-pilot cities. These results are confirmed through robustness tests including instrumental variable analysis, homogeneous treatment effects, Bacon decomposition, and heterogeneity robust estimation. The haze-reducing impact of LCCP policy is particularly pronounced in eastern regions, larger cities, and cities with a high level of information. Mechanisms analysis show that the policy works by enhancing economic development and government support (macro level), increasing industrial scale and competitiveness (meso level), and improving green technology innovation and energy efficiency (micro level). Additionally, LCCP policy exhibits border effect, where its haze reduction effect intensifies with the distance from each pilot city to its provincial border. The effective range of the spillover effect of LCCP policy is within 350 km.

Suggested Citation

  • Ge, Liming & Zheng, Heyun & Lv, Kangjuan & Huang, Han & Tan-Soo, Jie-Sheng & Feng, Chen, 2025. "The effect of low-carbon city construction on PM2.5: Evidence from China," Energy Economics, Elsevier, vol. 149(C).
    • Handle: RePEc:eee:eneeco:v:149:y:2025:i:c:s0140988325005626
    DOI: 10.1016/j.eneco.2025.108735
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    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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