China’s New Energy Policies and Green Economic Development – A Quasi-Natural Experiment Based on New Energy Demonstration City Policies
DOI:
https://doi.org/10.13052/spee1048-5236.4523Keywords:
New energy demonstration city, green economic development, technological innovation capacity, PSM-DIDAbstract
The “New Energy Demonstration City” plan plays a key role in promoting ecological modernization and achieving the “dual carbon” goals in China. This study uses data from 277 prefecture level cities between 2009 and 2022 to examine the impact of this policy on the development of green economy. We view the implementation of policies as an opportunity to approach natural experimentation, using a difference-in-differences (DID) method and controlling for the common factors that vary over time and the unique characteristics of each city. The results show that once a city is listed as a demonstration city, its green total factor productivity will significantly improve, with an average increase of approximately 0.1 units, and this effect will become stronger over time. However, the benefits of policies are not the same everywhere. The response is more pronounced in cities in the eastern region, as well as those that do not rely on mining or resource extraction for their livelihoods; However, resource dependent cities have seen almost no substantial improvement. In addition, the local technological innovation capability plays an amplifying role, and the policy effect is much stronger in cities where green patent activities are more active. These findings indicate that whether a city can successfully promote low-carbon transformation largely depends on its existing institutional foundation and innovation strength.
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