THE EFFECT OF SUSTAINABLE DEVELOPMENT PLANNING ON NATURAL CAPITAL: EVIDENCE FROM CHINA

Abstract

Coordinating ecological protection and economic development is a dilemma for resource-based cities to achieve sustainable development. This paper is the first study to estimate the causal impact of sustainable development planning on natural capital. We take the release of the Sustainable Development Plan for Resource-based Cities (SDPRC) as an exogenous shock and find that the SDPRC significantly increases the Normalized Difference Vegetation Index (NDVI) in resource-based counties. Heterogeneous analyses suggest that the impact is larger in counties with better economic performance, larger scale, and located in western and northeastern regions. Moreover, the effects of the SDPRC in different types of counties on natural capital are heterogeneous. This paper underscores the importance of policies aiming for promoting sustainable development, which increases natural capital and coordinates economic development and ecological protection in resource-based counties.