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Does incentive-based voluntary emission reduction mechanism improve urban carbon unlocking efficiency? A quasi-natural experiment on carbon inclusion policy

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  • Weng, Shimei
  • Chen, Jianbao
  • Tao, Weiliang
  • Song, Malin

Abstract

As an innovative voluntary mechanism, the carbon inclusion policy offers a novel solution for China to accelerate its carbon neutrality goals. Exploring this policy's carbon unlocking effect is crucial for encouraging individuals and enterprises to develop carbon reduction habits and overcome high-carbon path dependence that arises during social development. This paper uses Chinese cities as a case study to examine the impact and mechanisms of carbon inclusion policy on carbon unlocking efficiency through a staggered difference-in-differences model, which allows inconsistent policy implementation time points. The findings show that this policy enhances carbon unlocking efficiency and fosters socially sustainable development, with robustness tests supporting these results. The effect is stronger in cities with higher levels of government intervention, economic development, energy consumption structures, and those identified as initial pilot cities. Additionally, the policy improves carbon unlocking efficiency by promoting green technology innovation and renewable energy investment at the enterprise level, as well as increasing environmental awareness and energy conservation at the public level. Moreover, digital infrastructure and urbanization development amplify the policy effect. This study empirically supports incentive-based voluntary emission reduction policies in achieving the “dual carbon” objectives and offers policy recommendations for the nationwide promotion of carbon inclusion initiatives.

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  • Weng, Shimei & Chen, Jianbao & Tao, Weiliang & Song, Malin, 2025. "Does incentive-based voluntary emission reduction mechanism improve urban carbon unlocking efficiency? A quasi-natural experiment on carbon inclusion policy," Energy, Elsevier, vol. 318(C).
  • Handle: RePEc:eee:energy:v:318:y:2025:i:c:s0360544225004153
    DOI: 10.1016/j.energy.2025.134773
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