The Impact of Policy-Driven Carbon Emission Outsourcing: An Empirical Analysis of Green Innovation and Pollution Transfer Mechanisms

The low-carbon city pilot policy (LCCP) is an important measure for China toad-dress climate change and promote low-carbon transformation under the goals of carbon peaking and carbon neutrality. Based on the LCCP, this study uses the difference-in-differences method to explore the impact of the policy on the real carbon emissions, the carbon emissions transferred by enterprises along the industrial chain to down-stream enterprises (i.e., carbon out sourcing), and green invention and innovation of enterprises by quantifying the changes of enterprises’ comprehensive carbon emissions, carbon outsourcing, and green patent applications before and after the implementation of the low-carbon pilot policy. The results show that the pilot policy significantly inhibits the real carbon emissions (1.85%) and carbon outsourcing (44.46%) of enterprises and significantly enhance green invention and innovation of enterprises. The effect of the pilot policy on carbon emissions and the incentive effect on green invention and innovation both exhibit significant heterogeneity between heavily polluting and non-heavily polluting industries, as well as between the eastern and western regions. This paper provides a quantitative basis for the government to formulate incentive policies to strengthen green innovation, and regulate carbon emission.