Do model cities play a leading role? Evaluating the carbon abatement effects of energy saving and emission reduction demonstration cities in China

Numerous demonstration policies have been implemented in China to reduce carbon emissions. However, the leading role of such policies is rarely evaluated. Using the energy saving and emission reduction (ESER) demonstration city policy as an example, this study utilizes the spatial difference-in-differences (SDID) model to examine the local, spatial spillover, and policy withdrawal effects of carbon abatement in 283 cities from 2006 to 2020. The results indicate that: (1) The carbon emission intensity (CEI) of ESER demonstration cities decreased by 20.04%, whereas the CEI of the adjoining non-demonstration cities increased by 42.85%. (2) The policy effects are not permanent. The local effect disappeared one year after the policy withdrawal, while the spatial impact disappeared when the policy was canceled. (3) The negative local impact and positive spatial impact are mainly due to the administration-driven environmental regulation and industrial agglomeration. (4) The impact of the ESER project is more noticeable in underdeveloped, resource-based, and fiscally constrained cities. This study implies that the ESER project offers a temporary incentive for local carbon abatement but does not play a leading role for other cities. It is even that the policy is detrimental to carbon abatement in the adjoining nondemonstration cities as it increases the CEI of these cities. This study serves as a caution to the designers of demonstration policies and provides empirical implications for improving such policies.