Abstract: Cities help mitigate climate change and global warming. To help reduce carbon emissions at the city-level, China launched a low-carbon city pilot (LCCP) project in 2010. From the perspective of local government behavior, this study examines the impact of China’s LCCP project on land transfers in high energy-consumption industries (HECI) by applying a spatial difference-in-differences method. The results show that the LCCP project promoted local pilot cities to decrease HECI land transfers to reduce carbon emissions. In contrast, neighboring non-pilot cities are encouraged to increase HECI land transfers. Thus, this study suggests urban low-carbon programs and their overall effect should be given more importance. Further, environmental indicators of the cadre evaluation system should be strengthened and government monopolies on land transfers should be weakened to improve local government behavior toward China’s urban low-carbon efforts. This study provides empirical evidence of urban low-carbon programs from a developing country, and contributes to environmental decentralization literature by supplementing evidence from a centralized country. More importantly, the study results improve the limits of current LCCP research without considering the policy spatial spillover effect.

Keywords: Low-carbon city pilot; High energy-consuming industries; Land transfer; Inter-governmental strategic interaction; Spatial difference-in-differences