Quantifying the Green Gains: A Difference-in-Differences Analysis of Low-Carbon City Pilot Policies and Green Total Factor Productivity

In the past decade, China has enhanced its efforts to achieve sustainable and low-carbon development as a strategic response to climate change. According to their respective development stages and resource characteristics, cities in different regions have explored practical paths of carbon transformation through low-carbon city pilots. These pilots are designed to scale up nationwide low-carbon programs, focusing on embracing the challenge of peaking and neutrality carbon targets in China. This paper examines the performance of the low-carbon city pilot policy in China by analyzing panel data of prefecture-level cities from 2007 to 2020. Qualitatively, the paper estimates the impact of policies on GTFP and environmental innovation by incorporating a DID framework. These policies have had a positive impact on GTFP and innovation, but there is still potential for technological advancement. By incorporating the SBM-GML model, this study identifies further refinement areas for policy that would more firmly establish sustainable growth mechanisms within China’s evolving green development paradigm.