Can New Energy Become a Breakthrough for Economic Development—Based on Clean Development Mechanism Projects in Less Developed Coastal Cities

Coastal cities have the natural resource endowment and location advantages to develop new energy. However, heterogeneity in the economic development of China’s coastal cities has led to differences in the outcomes of environmental regulatory policies and related programs. To elucidate the difference, this paper obtained 5074 clean development mechanism (CDM) projects, which serves as a key instrument of the Kyoto Protocol designed to assist developing countries in achieving sustainable development through project-based emissions reductions and conducted a causal identification through quasi-experiment. And DID as well as DDD models are applied to identify the CDM effects on cities’ economic development. Main findings are: (1) Through the DID regression, this paper finds that the development of CDM projects have promoted the development of the city’s economy and lead to the upgrading of cities’ industries. (2) The promoting effects in economic development and employment are more prominent in coastal cities with high levels of economic development. (3) CDM can better facilitate economic development and employment in less developed coastal areas when implemented in conjunction with economic promoting policies. By applying quasi-experimental methods, including DID and DDD models, the research introduces a novel approach to assess the causal effects of CDM projects on city economies, offering fresh insights into sustainable development policies.