Econometric analysis of the impact of innovative city pilots on CO2 emissions in China

Technological progress is considered an effective means to reduce carbon emissions, and an innovative city pilot scheme may contribute to this target. However, the impact of innovation city construction on carbon emissions has not been systematically studied. Based on panel data of 285 cities at prefecture level and above in China from 2003 to 2017, this study employs the difference-in-differences approach to evaluate the impact of innovative city pilots on CO2 emissions. The results show that CO2 emissions in pilot cities are 17.1% lower than that in non-pilot cities, indicating that the scheme contributes significantly to carbon emission reduction. Meanwhile, the spatiotemporal characteristics suggest that the local effect increases over time and the spillover effect is significant within 150-250 km. Additionally, a heterogeneity analysis shows that the impact of the pilot scheme on CO2 emissions is mainly reflected in the central region and prefecture-level cities. Lastly, mechanism analysis indicates that the pilot policy reduces CO2 emissions by promoting technological innovation, industrial upgrading, and environmental governance, of which technological innovation plays the most important mediating role.