The impact of urban low-carbon transition development on residents’ consumption levels-evidence from China’s low carbon city pilot policy

Abstract

The green low-carbon transition is crucial not only for mitigating environmental challenges but also for reshaping residents’ consumption patterns. This study evaluates the impact of the urban low-carbon transition, specifically the Low-Carbon City Pilot (LCCP) policy, on the scale and structure of residents’ consumption. Leveraging the implementation of China’s LCCP policy as a quasi-natural experiment, we employ a multi-period difference-in-differences (DID) model and analyze panel data from 281 prefecture-level cities spanning 2007 to 2022. The findings indicate that the LCCP policy significantly expands the scale and improves the structure of residents’ consumption. These results withstand a series of rigorous robustness checks. Heterogeneity analysis further reveals that the policy’s impacts on residents’ consumption scale and structure vary across different consumption tiers and regions. Mechanism analysis suggests that the LCCP policy affects consumption primarily by increasing the supply of low-carbon products and strengthening residents’ low-carbon consumption awareness.