The Carbon Emission Reduction Effect of City Cluster-Evidence from the Yangtze River Economic Belt in China

Climate anomalies are affecting the world. How to reduce carbon emissions has become an important issue for governments and academics. Although previous researchers have discussed the factors of carbon emission reduction from environmental regulation, economic development, and industrial structure, limited studies have explored the carbon emission reduction effect of a city's spatial structure. Based on 108 Chinese cities from the Yangtze River Economic Belt between 2003 and 2017, this paper examines the impact of the city cluster policy on city carbon emissions using the difference-in-differences (DID) method. We find that: (1) The city cluster policy has significantly reduced the cities' carbon emissions by 7.4%. Furthermore, after a series of robust and endogenous tests, such as parallel trend and PSM-DID, the core conclusion still remains. (2) We further identify possible economic channels through this effect, and find that city cluster policy would increase city productivity, city technological innovation, and industrial structure optimization. The conclusions of this paper have important practical significance for China to achieve carbon neutrality and facilitate future deep decarbonization.