Can e-commerce reduce urban CO2 emissions? Evidence from National E-commerce Demonstration Cities policy in China

The existing studies ignore the potential impact of e-commerce on CO2 emissions. Based on panel data of 284 cities at the prefecture level and above in China from 2003 to 2019, we regard National E-commerce Demonstration Cities (NEDC) policy as a quasi-natural experiment and empirically examine the impact and mechanism of NEDC policy on urban CO2 emissions by using multi-period difference-in-difference (DID) model and mediating effect model. The results show that, under the premise of satisfying parallel trends, the NEDC policy significantly reduces urban CO2 emissions. Compared with the non-pilot cities, the NEDC policy leads to decreases in urban CO2 emissions by 0.83%. The result still holds after a series of robustness tests, which include placebo test, propensity score matching (PSM) DID estimation, and instrumental variable estimation. The NEDC policy reduces urban CO2 emissions through promoting industrial structure upgrading, green technology innovation, and economic agglomeration. Heterogeneity analysis shows that the reduction effect of NEDC policy on urban CO2 emissions is stronger in non-western cities, larger scale cities, and resource-based cities.