New energy vehicles and climate change mitigation in China: assessing the impact of promotion policies on urban carbon emissions

Purpose This study aims to assess the influence of China’s new energy vehicle promotion policy (NEVPP) on urban carbon emissions, exploring the potential and challenges of NEVs in achieving emission reduction goals. Design/methodology/approach This research treats the implementation of China’s NEVPP in 2009 and 2010 as a quasi-natural experiment. The difference-in-differences (DID) model is used to analyze the relationship between NEVPP and CO2 emissions. A panel data of 276 prefecture-level cities in China from 2006 to 2021 is used. Findings The promotion of NEVs in China effectively reduces urban carbon dioxide emissions. The emission reduction benefits are influenced by regional power production structures and power dependence. Regions with a higher proportion of clean energy in power generation experience a stronger inhibitory effect on carbon dioxide emissions from NEV promotion. Regions highly dependent on power transmission from other areas also enjoy greater emission reduction benefits. Additionally, areas with higher environmental awareness among residents and southern regions in China exhibit a more significant inhibitory effect on carbon dioxide emissions due to NEVPP. Originality/value This study contributes to the existing literature in several ways. First, using China, the world’s largest new energy vehicle market, as a sample, it provides novel empirical evidence on the impact of NEVs on carbon emissions. Second, it takes into account regional differences in power production structures and power supply and demand, enriching the understanding of the relationship between NEV adoption and emission reduction. Third, by analyzing the heterogeneity of residents’ environmental awareness and regional disparities between southern and northern areas, it offers valuable insights for different regions to formulate targeted NEV development strategies.