Synergy or siphoning: does the low-carbon city pilot policy enhance green economic efficiency?

Achieving efficient economic growth in a low-carbon manner is becoming a crucial aspect of sustainable development. Meanwhile, promoting coordinated development to achieve synergistic carbon reduction and efficiency enhancement across cities from a holistic perspective holds significant practical importance. Based on panel data from 282 Chinese cities spanning 2005 to 2019, this study employs staggered difference-in-differences (DID) and spatial Durbin DID models to investigate the direct and spatial spillover effects of China's low-carbon city pilot (LCCP) policy on green economic efficiency. The findings reveal several key insights: First, the LCCP policy significantly enhances green economic efficiency, primarily through advancements in green transportation, employment, and technology. Second, a notable spatial correlation exits in the green economic efficiency of Chinese cities, with spatial agglomeration generally trending upward over time. Third, local low-carbon city pilots can create a "siphoning effect" through technology and population concentration, inhibiting improvements in neighboring areas and impeding coordinated sustainable development among cities. Therefore, adopting a holistic perspective, establishing coordination mechanisms among cities, and promoting the optimal overall green economic efficiency within the region are essential for effective policy outcomes.