The role of low-carbon technology innovation incentive programs in achieving sustainable development goals in cities: Empirical evidence from 277 cities in China

Abstract

The low-carbon city pilot policy (LCCPP) aims to incentivize green technology innovation (GTI) at the urban level and reduce urban carbon emissions. This paper examines the impact of China’s LCCPP on urban GTI and its spatial spillover effects, aiming to inform sustainable development strategies. Using panel data from 277 Chinese cities, we employ a spatial progressive difference-in-differences (SPDID) model integrated with a novel spatial composite weight matrix (SCWM). Results reveal three key findings: (1) The LCCPP significantly enhances both green innovation quantity (GIN) and green innovation quality (GIL) of urban GTI, with a stronger effect on GIN than GIL; (2) The LCCPP has a significant spatial spillover effect on urban GTI. Moreover, compared to the GIN, the LCCPP has a more significant driving effect on the GIL in neighboring cities; (3) The driving effect of LCCPP on urban GTI exhibits a four-year implementation lag. The direct and spatial spillover effects of LCCPP on urban GTI are more significant in eastern cities and non-resource-based cities. These findings underscore the critical role of spatial interdependence and phased policy learning in urban sustainable development. We recommend tiered policy diffusion, interregional innovation alliances, and tailored governance frameworks to optimize green innovation outcomes. This research advances the theoretical understanding of environmental policy design while offering actionable insights for global cities pursuing sustainable development.