How the Pilot Low-Carbon City Policy Promotes Urban Green Innovation: Based on Temporal-Spatial Dual Perspectives

Abstract

Enhancing green innovation levels is an important objective of the pilot low-carbon city policy (PLCC) in China, but the spatial and temporal heterogeneity of the PLCC policy’s effect on green innovation is unclear. Based on panel data from 285 Chinese cities during 2005–2020, this paper assesses the impact of PLCC on regional green innovation using the difference-in-difference (DID) method. The empirical results demonstrate that the PLCC can obviously promote urban green innovation. In terms of the temporal dimension, the policy effect of PLCC on regional green innovation shows an inverted “U” shape and peaks in the seventh year after implementation. From the spatial dimension, the PLCC can promote surrounding cities’ green innovation through spatial spillover effects within 200 km, and the spillover effect decreases with increasing distance. Mechanism analysis indicates that the PLCC policy can promote regional green innovation by enhancing regional environmental regulations and alleviating financing constraints. This paper explores the temporal and spatial policy effects of PLCC, which can provide effective paths and policy recommendations for China to achieve its “dual carbon” goals.