Does the Innovative City Pilot Policy Promote Urban Energy Use Efficiency? Evidence from China

Abstract

The innovative city pilot policy (ICPP) is a key policy practice in China’s innovation-driven economic strategy, yet its influence on urban energy use efficiency (UEUE) has yet to be assessed. This study used balanced panel data from Chinese cities from the period of 2006 to 2022 to investigate the impact of innovative cities on urban energy consumption efficiency. The double-difference method, which treats creative cities as quasi-natural experiments, was applied to identify the impact mechanism of these cities. Additionally, this study looked at heterogeneity from several angles and assessed the effects of the policy on the environment. Following thorough testing to guarantee the reliability of the findings of this study—such as changing variables, ruling out further policy interferences, and running placebo tests—it can be concluded that the pilot program significantly improves urban energy consumption. The mechanism analysis performed in this study shows that, via talent concentration, utilizing technology, and optimizing the industrial structure, the creative city pilot policies increase energy consumption efficiency. Additionally, a heterogeneity analysis shows that eastern cities and cities with a high degree of digital finance benefit most from the legislation in terms of energy consumption efficiency. The application of creative city pilot programs has a more noticeable effect on increasing the energy consumption efficiency in eastern cities, as well as in cities with a high degree of digital infrastructure and digital finance, according to the heterogeneity analysis. Furthermore, an environmental consequence test shows that, by encouraging the growth of UEUE, the development of innovative cities can successfully help to reduce carbon emissions.