Regional variations in energy efficiency: Modifying China's industrial approaches to meet sustainability goals

Abstract

China has devoted much attention to the “carbon peaking” and “carbon neutrality” objectives, the related research focuses on renewable energy, carbon removal, electrification, and hydrogen technologies. Yet, energy efficiency, especially in resource-based and older industrial cities continue to be a research gap in this regard. This study fills this research gap by assessing the role of China's national Industrial Transformation and Upgrade Demonstration Zones (ITUDZ) in energy conservation from 2010 to 2021. In this paper, applying the time-varying Difference-in-Differences (DID) method, we confirm that ITUDZ effectively decreases the energy utilization of these cities. These tests are reliable based on the results obtained above. Mechanism assessments show that the ITUDZ does so through enhancing green innovation and adjusting industrial patterns and that marketization enhances the energy-saving impacts. Geographical heteroscedasticity tests also show that the effects are significant for multi-urban areas and eastern China but weaker for central-western and single-urban city areas. Therefore, this study serves to add to the existing knowledge regarding place-based industrial policies and their contribution towards the realization of China's sustainable development agenda.