Technology-driven green governance in low-carbon cities: policy innovation and employment effects

As the main objective of a low-carbon transition policy is to achieve green and sustainable development and since employment is related to people's livelihoods, will the low-carbon transition affect employment? Based on data from 2000–2022 for prefecture-level cities and above, we use in this paper a multiperiod difference-in-difference approach to assess the employment impacts of two different low-carbon transition policies: the low-carbon city pilot (LCCP) and the carbon emissions trading pilot (CETP). We found that both the LCCP and the CETP have positive effects on urban employment and that the marginal utility of the CETP on employment is greater than that of the LCCP. From the perspective of green sustainability, this paper reveals that the two low-carbon transition policies (LCTPs) increase urban employment through three green mechanisms: the green factor input expansion effect, the green technology creation effect and the green product demand effect. Both LCTPs have distinctly different and complementary employment impacts in different sectors, regions, and cities of different scales. The synergies between the LCTPs and data factors have a more obvious marginal effect on “stabilizing employment” and “stabilizing growth”. This paper's findings provide empirical evidence to better understand the relationship between sustainable development and employment.