Can green infrastructure investment accelerate low-carbon urbanization? Evidence from China

This paper examines whether and through which mechanisms public green infrastructure investment accelerates low-carbon urbanization. Utilizing panel data from Chinese prefecture-level cities, we estimate city- and year-fixed-effects models exploiting within-city variation in green investment outlays. Results show that green infrastructure investment significantly enhances low-carbon urbanization. Mediation analyses confirm two primary mechanisms: improved total-factor energy efficiency and industrial upgrading, demonstrating efficiency- and structure-driven channels. Moreover, the effectiveness of green infrastructure investments varies notably across cities, influenced by regional location, city size, and resource dependence. These findings underscore the necessity for policymakers to tailor green investment strategies to local conditions, emphasizing targeted investment pipelines and rigorous ex-ante screening to maximize low-carbon benefits.