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Can Urban Rail Transit in China Reduce Carbon Dioxide Emissions? An Investigation of the Resource Allocation Perspective

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  • Shengyan Xu

    (School of Economics and Finance, Hohai University, Hohai Avenue No. 1915, Changzhou 213200, China)

  • Yibo Chen

    (School of Economics and Finance, Hohai University, Hohai Avenue No. 1915, Changzhou 213200, China)

  • Miao Liu

    (School of Economics and Finance, Hohai University, Hohai Avenue No. 1915, Changzhou 213200, China)

Abstract

The construction of urban rail transit plays a crucial role in improving traffic conditions in large cities, promoting green urban development, and reducing carbon dioxide emissions. Based on Chinese urban data, this paper employs a time-varying difference-in-difference model combined with the Heckman two-step method to control the sample selection problem. The objective of this methodology is to ascertain whether urban rail transit exerts a traffic creation effect or a traffic substitution effect. The following results were found: (1) Urban rail transit notably reduces the bus ridership per capita and the carbon dioxide emissions per capita in cities, a finding which passes a series of robustness tests, and the traffic substitution effect increases as the number of urban rail transit lines increases. (2) Heterogeneity analysis reveals that the traffic substitution effect in terms of carbon reduction in urban rail transit is greater in non-resource-based cities, cities with large carbon emissions, and cities with low fiscal pressure. (3) Urban rail transit reduces the carbon dioxide emissions per capita by improving the allocation efficiency of factor resources and further generating technological innovation and structural upgrading effects. (4) Spatial econometric analysis shows that urban rail transit has a significant spatial spillover effect on the reduction in carbon dioxide emissions per capita in neighboring cities. In short, urban rail transit can reduce the carbon dioxide emissions per capita by improving resource allocation and support the attainment of carbon peak and carbon neutrality goals. This effect is greater in large cities where urban rail transit networks have been established. Therefore, cities should actively promote the construction of metro and other rail transit within the scope of urban financial resources and make full use of the carbon reduction and efficiency enhancement functions of urban rail transit. In this way, urban rail transit can become an effective tool for the realization of sustainable development.

Suggested Citation

  • Shengyan Xu & Yibo Chen & Miao Liu, 2025. "Can Urban Rail Transit in China Reduce Carbon Dioxide Emissions? An Investigation of the Resource Allocation Perspective," Sustainability, MDPI, vol. 17(9), pages 1-32, April.
  • Handle: RePEc:gam:jsusta:v:17:y:2025:i:9:p:3901-:d:1642917
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