Bridging the gap: can low-carbon city policies reduce carbon inequality? Evidence from China’s pilot program

Abstract

To advance urban low-carbon transitions, prioritizing carbon emission regulation and enhancing carbon equity is critical. This paper evaluates the impact of China’s Low-Carbon City Pilot (LCCP) policy on carbon inequality (CI) using data from 276 cities (2006–2021). We employ a staggered difference-in-differences design, treating LCCP rollout as a quasi-natural experiment, and conduct robustness checks to validate the results. Our findings show that the LCCP policy significantly reduces CI by 2% in pilot cities compared to non-pilot cities. This reduction is driven by improved energy efficiency, optimized industrial structures, and reduced income inequality. Regionally, the policy exhibits heterogeneous effects, mitigating CI more effectively in non-resource-based, mature-type and regenerative-type resource-based, multi-center structure and eastern cities. Furthermore, the Innovative City Pilot policy markedly strengthened the effect of the LCCP policy in reducing CI, demonstrating a synergistic interaction. In contrast, combining the Carbon Emission Trading Pilot with LCCP policies widens CI. These results highlight the importance of integrating equity concerns with efficiency-oriented climate strategies. Dual-focused policies that balance environmental and social goals can accelerate progress toward China’s “dual carbon” targets.