IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i11p8727-d1158231.html

Can the New Energy Demonstration City Policy Promote Green and Low-Carbon Development? Evidence from China

Author

Listed:
  • Bo Chen

    (School of Economics, Jinan University, Guangzhou 510632, China)

  • Feng Jin

    (School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China)

  • Guangchen Li

    (School of Economics, Beijing Wuzi University, Beijing 101149, China)

  • Yurong Zhao

    (School of Applied Science and Technology, Beijing Union University, Beijing 100012, China)

Abstract

Developing new energy is critical to China’s green and low-carbon development. Therefore, in 2014, the Chinese government promulgated a vital innovation policy, namely, the New Energy Demonstration City Policy (NEDCP), which is expected to reduce energy consumption and carbon emissions in Chinese cities. Is the NEDCP facilitating green and low-carbon development in China, and if so, how? Based on unbalanced panel data from 2003 to 2017 at the city level in China, in this study we evaluate the impact of the NEDCP on green and low-carbon development using the staggered difference-in-differences (DID) method. We find that the NEDCP can significantly contribute to green and low-carbon development in China. After various robustness tests, our results are still valid. According to the heterogeneity analysis, non-resource and non-old industrial-base cities have a greater positive impact from this policy. The mechanism analysis denotes that the positive policy effect works by upgrading the industrial structure and stimulating urban innovation. The substantial empirical evidence presented in this paper supports the continued promotion and implementation of new-energy demonstration cities.

Suggested Citation

  • Bo Chen & Feng Jin & Guangchen Li & Yurong Zhao, 2023. "Can the New Energy Demonstration City Policy Promote Green and Low-Carbon Development? Evidence from China," Sustainability, MDPI, vol. 15(11), pages 1-16, May.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:11:p:8727-:d:1158231
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/11/8727/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/11/8727/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lai, Wangyang & Song, Hong & Wang, Chang & Wang, Huanhuan, 2021. "Air pollution and brain drain: Evidence from college graduates in China," China Economic Review, Elsevier, vol. 68(C).
    2. Zhu, Bangzhu & Zhang, Mengfan & Zhou, Yanhua & Wang, Ping & Sheng, Jichuan & He, Kaijian & Wei, Yi-Ming & Xie, Rui, 2019. "Exploring the effect of industrial structure adjustment on interprovincial green development efficiency in China: A novel integrated approach," Energy Policy, Elsevier, vol. 134(C).
    3. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    4. Destek, Mehmet Akif, 2016. "Renewable energy consumption and economic growth in newly industrialized countries: Evidence from asymmetric causality test," Renewable Energy, Elsevier, vol. 95(C), pages 478-484.
    5. Sohag, Kazi & Taşkın, F. Dilvin & Malik, Muhammad Nasir, 2019. "Green economic growth, cleaner energy and militarization: Evidence from Turkey," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    6. Wen, Huwei & Lee, Chien-Chiang & Zhou, Fengxiu, 2021. "Green credit policy, credit allocation efficiency and upgrade of energy-intensive enterprises," Energy Economics, Elsevier, vol. 94(C).
    7. Chen, Chaoyi & Pinar, Mehmet & Stengos, Thanasis, 2020. "Renewable energy consumption and economic growth nexus: Evidence from a threshold model," Energy Policy, Elsevier, vol. 139(C).
    8. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    9. Apergis, Nicholas & Payne, James E., 2011. "The renewable energy consumption-growth nexus in Central America," Applied Energy, Elsevier, vol. 88(1), pages 343-347, January.
    10. Thorsten Beck & Ross Levine & Alexey Levkov, 2010. "Big Bad Banks? The Winners and Losers from Bank Deregulation in the United States," Journal of Finance, American Finance Association, vol. 65(5), pages 1637-1667, October.
    11. Zhao, Yong & Shi, Xunpeng & Song, Feng, 2020. "Has Chinese outward foreign direct investment in energy enhanced China's energy security?," Energy Policy, Elsevier, vol. 146(C).
    12. Lu, Yi & Tao, Zhigang & Zhu, Lianming, 2017. "Identifying FDI spillovers," Journal of International Economics, Elsevier, vol. 107(C), pages 75-90.
    13. Ji, Qiang & Zhang, Dayong, 2019. "How much does financial development contribute to renewable energy growth and upgrading of energy structure in China?," Energy Policy, Elsevier, vol. 128(C), pages 114-124.
    14. Georgios Maris & Floros Flouros, 2021. "The Green Deal, National Energy and Climate Plans in Europe: Member States’ Compliance and Strategies," Administrative Sciences, MDPI, vol. 11(3), pages 1-17, July.
    15. Destek, Mehmet Akif & Aslan, Alper, 2020. "Disaggregated renewable energy consumption and environmental pollution nexus in G-7 countries," Renewable Energy, Elsevier, vol. 151(C), pages 1298-1306.
    16. Neij, Lena & Heiskanen, Eva & Strupeit, Lars, 2017. "The deployment of new energy technologies and the need for local learning," Energy Policy, Elsevier, vol. 101(C), pages 274-283.
    17. H. Damon Matthews & Nathan P. Gillett & Peter A. Stott & Kirsten Zickfeld, 2009. "The proportionality of global warming to cumulative carbon emissions," Nature, Nature, vol. 459(7248), pages 829-832, June.
    18. Wang, Juan & Zhang, Sulan & Zhang, Qingjun, 2021. "The relationship of renewable energy consumption to financial development and economic growth in China," Renewable Energy, Elsevier, vol. 170(C), pages 897-904.
    19. Li, Guangchen & Wei, Weixian, 2021. "Financial development, openness, innovation, carbon emissions, and economic growth in China," Energy Economics, Elsevier, vol. 97(C).
    20. Junhong Bai & Jiayu Lu & Sijia Li, 2019. "Fiscal Pressure, Tax Competition and Environmental Pollution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 431-447, June.
    21. Dai, Hancheng & Xie, Xuxuan & Xie, Yang & Liu, Jian & Masui, Toshihiko, 2016. "Green growth: The economic impacts of large-scale renewable energy development in China," Applied Energy, Elsevier, vol. 162(C), pages 435-449.
    22. Ying Li & Yung-ho Chiu & Liang Chun Lu, 2019. "New Energy Development and Pollution Emissions in China," IJERPH, MDPI, vol. 16(10), pages 1-24, May.
    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. Yuan Feng & Ying Li & Changfei Nie & Zhi Chen, 2024. "Can an Energy Transition Strategy Induce Urban Green Innovation? Evidence from a Quasi-Natural Experiment in China," Sustainability, MDPI, vol. 16(8), pages 1-23, April.
    2. Wang, Zongrun & Cao, Xuxin & Ren, Xiaohang & Gozgor, Giray, 2024. "Digital finance and the energy transition: Evidence from Chinese prefecture-level cities," Global Finance Journal, Elsevier, vol. 61(C).
    3. Zhou, Dao & Liu, Ming & Wang, Zhenzhen & Fu, Yu & Zhang, Kezhen & Yan, Junjie, 2025. "Design and performance evaluation of a new steam/water hybrid thermal energy storage system integrated within a coal-fired power plant," Energy, Elsevier, vol. 335(C).
    4. Yu, Zhichao & Xie, Wenlan & Guo, Junjie & Yang, Zhongyu, 2024. "Green effect of energy transition policy: A quasi-natural experiment based on new energy demonstration cities," Finance Research Letters, Elsevier, vol. 66(C).
    5. Wang, Lianghu & Shao, Jun, 2025. "How does regional integration policy affect urban energy efficiency? A quasi-natural experiment based on policy of national urban agglomeration," Energy, Elsevier, vol. 319(C).
    6. Zou, Tong & Li, Fanrong & Guo, Pibin, 2024. "Advancing effective energy transition: The effects and mechanisms of China's dual-pilot energy policies," Energy, Elsevier, vol. 307(C).
    7. Jun Li & Shuqi Li & Yifeng Qiu, 2025. "How Does Public Policy Drive Urban Energy Transition? Evidence from China," Economies, MDPI, vol. 13(7), pages 1-16, July.
    8. Zhang, Xiufeng & Yan, Tong & Zhang, Shengxin & Zhang, Zhenhua & Feng, Yanchao, 2025. "Assessing the synergy reduction effects of the renewable energy policies on environmental pollution and carbon emissions in China," International Review of Financial Analysis, Elsevier, vol. 105(C).
    9. Lianghu Wang & Jun Shao, 2025. "Urban Circulation Network Construction Policy and Carbon Emission Performance: Evidence from the Layout of National Circulation Node Cities," SAGE Open, , vol. 15(4), pages 21582440251, October.
    10. Chen, Bo & Xu, Huange & Li, Guangchen, 2023. "Entry deregulation and labor share: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PD).
    11. Ren, Jiazhen & Liu, Ying & Ren, Yida & Zhang, Ping, 2025. "Renewable energy investment in China's new demonstration cities: A quasi-natural experiment," Utilities Policy, Elsevier, vol. 96(C).
    12. Lee, Chien-Chiang & Wang, Tianhui, 2024. "The impact of renewable energy policies on the energy transition -– An empirical analysis of Chinese cities," Energy Economics, Elsevier, vol. 138(C).

    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. Lin, Boqiang & Xu, Chongchong, 2024. "Reaping green dividend: The effect of China's urban new energy transition strategy on green economic performance," Energy, Elsevier, vol. 286(C).
    2. Wang, Qiao & Yi, Hongtao, 2021. "New energy demonstration program and China's urban green economic growth: Do regional characteristics make a difference?," Energy Policy, Elsevier, vol. 151(C).
    3. Xiong, Jiacai & Huang, Ling & Wang, Xin & Bai, Martin & Qin, Yafeng, 2024. "Local government fiscal stress and regional entrepreneurship: Evidence from a natural experiment in China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 177-193.
    4. Li, Qihang & Zhang, Quanfei, 2025. "Administrative division adjustment and enterprise carbon emissions: Evidence from City-County Merger in China," Energy Economics, Elsevier, vol. 149(C).
    5. Zihan Hu & Min Wu & Dan Yang & Tao Luo & Yihao Tian, 2024. "How Resource-Exhausted Cities Get Out of the Innovation Bottom? Evidence from China," Land, MDPI, vol. 13(8), pages 1-22, July.
    6. Xiaoling Wang & Yiting Han & Baofeng Shi & Mohammad Zoynul Abedin, 2025. "The impacts of green credit guidelines on total factor productivity of heavy-polluting enterprises: A quasi-natural experiment from China," Annals of Operations Research, Springer, vol. 347(1), pages 41-68, April.
    7. Zhong, Shen & Zhou, Zhicheng & Gao, Wei, 2025. "Impact of regional finance reform and innovation policies on green innovation in pilot cities: A quasi-natural experiment," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 888-911.
    8. Shrestha, Anil & Mustafa, Andy Ali & Htike, Myo Myo & You, Vithyea & Kakinaka, Makoto, 2022. "Evolution of energy mix in emerging countries: Modern renewable energy, traditional renewable energy, and non-renewable energy," Renewable Energy, Elsevier, vol. 199(C), pages 419-432.
    9. Ai, Hongshan & Tan, Xiaoqing & Mangla, Sachin Kumar & Emrouznejad, Ali & Liu, Fan & Song, Malin, 2025. "Renewable energy transition and sustainable development: Evidence from China," Energy Economics, Elsevier, vol. 143(C).
    10. Meshkatus Salehin & Judit T. Kiss, 2022. "Testing the Causal Relationship between Economic Growth and Renewable Energy Consumption: Evidence from a Panel of EAGLE Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 281-288.
    11. Wu, Xiting & Jiang, Haiyan & Lin, Hui & You, Jiaxing, 2023. "Why Muddy the Water? Short selling and the disclosure of proprietary information," The British Accounting Review, Elsevier, vol. 55(4).
    12. Li Wang & Qian Xie & Fei Xue & Zongxin Li, 2022. "Does Smart City Construction Reduce Haze Pollution?," IJERPH, MDPI, vol. 19(24), pages 1-17, December.
    13. Aslan, Alper & Ocal, Oguz & Ozsolak, Baki & Ozturk, Ilhan, 2022. "Renewable energy and economic growth relationship under the oil reserve ownership: Evidence from panel VAR approach," Renewable Energy, Elsevier, vol. 188(C), pages 402-410.
    14. Gao, Anna & Sun, Mei & Wen, Weixin, 2024. "Uncovering the spillover effects between the new energy industry and eleven economic sectors in China: Evidence based on stock data," Energy, Elsevier, vol. 301(C).
    15. Yan, Xiaolei & He, Taiyi & Qian, Pengcheng & Liu, Zhongwen, 2024. "Does the construction of Pilot Free Trade Zones promote the development of green economy? - A quasi-natural experiment evidence from China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 208-224.
    16. Oğuz Saygın & Ömer İskenderoğlu, 2022. "Does the level of financial development affect renewable energy? Evidence from developed countries with system generalized method of moments (System‐GMM) and cross‐sectionally augmented autoregressive distributed lag (CS‐ARDL)," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 1326-1342, October.
    17. Shao, Hanhua & Wang, Yuansheng & Wang, Yao & Li, Yuanjia, 2022. "Green credit policy and stock price crash risk of heavily polluting enterprises: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 271-287.
    18. Yang, Zhiqing & Liu, Peiyao & Luo, Lianfa, 2023. "Growing exports through ISO 9001 quality certification: Firm-level evidence from Chinese agri-food sectors," Food Policy, Elsevier, vol. 117(C).
    19. Hsu, Wen-Tai & Lu, Yi & Luo, Xuan & Zhu, Lianming, 2023. "Foreign direct investment and industrial agglomeration: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 610-639.
    20. Li, Raymond & Lee, Hazel, 2022. "The role of energy prices and economic growth in renewable energy capacity expansion – Evidence from OECD Europe," Renewable Energy, Elsevier, vol. 189(C), pages 435-443.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:gam:jsusta:v:15:y:2023:i:11:p:8727-:d:1158231. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.