Impact of Policy Intensity on Carbon Emission Reductions: Based on the Perspective of China’s Low-Carbon Policy

Abstract

Economic development often results in significant greenhouse gas emissions, contributing to global climate change, which demands immediate attention. Despite implementing various low-carbon policies to promote sustainable economic and environmental progress, current evaluations reveal limitations and deficiencies. Therefore, this study utilizes a dataset detailing policy intensity at a prefecture-level city in China to investigate the impacts of these policies on carbon emission reduction from 2007 to 2022 in 334 prefecture-level cities, employing a fixed-effects model. Additionally, it assesses the policies’ efficacy. The findings indicate a significant negative correlation between China’s low-carbon policies and carbon emissions, supported robustly by multiple tests. Specifically, a one-unit increase in China’s policy intensity correlates with a 0.53-unit reduction in carbon emissions. Furthermore, the heterogeneity analysis shows that variations in urban agglomerations, environmental resource endowments, pollution levels, and low-carbon policy intensities influence the effectiveness of these policies in reducing carbon emissions. This analysis underscores that policy intensity achieves emission reductions through technological innovation, industrial transformation, welfare crowding out, and pollution transfer, with varying impacts across different environmental contexts, pollution levels, and policy intensities. Based on this analysis, we recommend several policies: formulating low-carbon strategies tailored to local conditions, enhancing regional low-carbon policies, establishing cross-regional coordination mechanisms, and so on. These recommendations not only offer valuable policy insights for China but also serve as useful references for the green and sustainable development of other developing countries.