Breaking the inertia of urban energy systems: Does the new energy demonstration city construction improve carbon unlocking efficiency?

The New Energy Demonstration City (NEDC) policy is a vital initiative for energy transformation and sustainable economic development in China. It provides possible effective paths to solve carbon lock-in dilemma. However, existing literature lacks a scientific assessment of this policy's carbon unlocking effects. Using panel data from 283 Chinese cities and a novel evaluation index system to measure carbon unlocking efficiency (CUE) from 2008 to 2021, we analyze the NEDC policy's impact on urban CUE through difference-in-differences and dual machine learning models. The findings show that NEDC policy significantly improves the CUE of pilot cities, which is supported by a series of robustness tests. Technological innovation, energy-saving, and structural upgrading are three key influence channels through which the NEDC policy affects CUE. The impact is more pronounced in cities with larger renewable energy investment, stronger green consumption concept, and non-resource-based cities. Notably, the effectiveness of the policy increases as urban CUE levels rise. Additionally, the new energy vehicle promotion policy can enhance the improvement effect of NEDC policy, whereas the energy-consumption trading policy does not have a similar strengthening effect. Our findings provide useful policy implications to accelerate energy transition and break the carbon lock-in deadlock in China and other developing countries.