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Does climate policy exacerbate spatial development inequality? Quasi-experimental evidence from China

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  • Zhu, Xiaoke
  • Liu, Weigang
  • Liu, Jian

Abstract

This study aims to examine the causal relationship between climate policy and spatial development inequality within cities. To this end, we leverage the temporal and spatial variations in the implementation of the low-carbon city pilot initiative (LCCPI) to perform a staggered difference-in-difference (DID) estimation. Our estimated results demonstrate that the LCCPI is associated with an approximate 4.4 % reduction in the Gini coefficient for nighttime light intensity. Our findings are robust to alternative measures and different specifications. Further mechanism analyses reveal that the LCCPI operates by narrowing the green innovation gap and improving the factor allocation. Notably, we observe a more pronounced decrease in spatial development inequality in resource-dependent and high-marketization cities.

Suggested Citation

  • Zhu, Xiaoke & Liu, Weigang & Liu, Jian, 2025. "Does climate policy exacerbate spatial development inequality? Quasi-experimental evidence from China," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 120, pages 1-12.
    • Handle: RePEc:zbw:espost:313120
    DOI: 10.1016/j.scs.2025.106166
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    More about this item

    Keywords

    climate policy; spatial development inequality; green innovation; factor allocation; staggered DID;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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