Carbon Emissions within Compact Cities: Evidence from China’s Urban Forms

Abstract This study investigates the influence of urban form compactness on industrial carbon emissions using microlevel tax survey data and nighttime light imagery from Chinese cities between 2008 and 2016. We construct a novel measure of urban compactness based on spatial geometry and examine its causal effect on firm-level CO 2 emissions. Our main findings reveal that higher urban compactness significantly reduces industrial carbon emissions, supporting the hypothesis that densely developed cities facilitate more efficient production and lower environmental impacts. We identify three key mechanisms through which compactness operates: enhanced industrial agglomeration promotes resource sharing and scale economies, improved green technology diffusion accelerates the adoption of low-carbon innovations, and optimized resource allocation directs factors toward more efficient firms. Furthermore, we show that digital infrastructure development, high-tech industrial parks, and smart city initiatives amplify the emission reduction effects of compact urban forms. These results underscore the importance of integrated urban planning and spatial policy in achieving China’s Dual Carbon Goals and promoting sustainable industrial development.