Towards sustainable development: assessing the effects of low-carbon city pilot policy on residents’ welfare

To realize low-carbon transition and pursue sustainable development, China’s central government formulated the low-carbon city pilot (LCCP) policy. Current studies focus primarily on the effect of the policy at the macro level of the cities, including economic, industrial, technological, environmental dimensions. So far, few has looked at the effect of the LCCP policy on residents’ welfare. To address this gap, this study treats the LCCP policy as an exogenous policy shock and employs the Difference-in-Differences model to examine its influence on residents’ welfare from the perspective of ecological welfare performance (EWP). Additionally, this study integrates the concept of quality of life into the EWP evaluation system to provide a comprehensive reflection of residents’ welfare. The results demonstrate that the LCCP policy significantly increase EWP in pilot cities, with a series of robustness tests support this finding. Besides, mechanism examination indicates that the LCCP policy enhances EWP through optimizing industrial structure, promoting low-carbon technological innovation, and increasing digital economy. Moreover, heterogeneous results reveal a significant increase of EWP in eastern cities, non-resource-based cities, and cities with high government environmental governance intensity due to the LCCP policy. This study empirically confirms the positive role of the LCCP policy in improving residents’ welfare, provides evidence for synergistic development of other countries seeking to advance low-carbon transition alongside improvements in residents’ welfare.