Can urbanization move ahead with energy conservation and emission reduction? New evidence from China

Abstract

In China, urbanization is mainly stimulated by resource flows, and industrialization is normally accompanied by an increase in the proportion of the urban population and urban land area. During the process, urbanization at a rapid pace often induces a huge consumption of energy and environmental emissions. Nevertheless, it is also worth considering whether urbanization positively affects urban environment promotion. With a more solid economic foundation, urban subjects will carry out energy conservation and emission reduction (ECER) from various aspects, primarily focusing on technological innovation, advancement of production mechanisms and structural optimization. Along these lines, this study aims to examine urbanization's direct and indirect impact on energy conservation and emission reduction using panel data consisting of 196 Chinese cities for the period of 2011–2018 with a Slacks-based model and transmission mechanism. Study results indicate that urbanization's development can give a direct impetus to ECER, which is quite robust after employing a series of robust tests, including instrumental variable estimation. Besides, urbanization indirectly influences ECER by promoting economic growth, better allocation of resources, internet advancement, and adjusting the employment structure. Further investigation suggests that the relationship between urbanization and ECER is nonlinear, depending on the levels of the above-mentioned mediating variables. Finally, essential policy suggestions are proposed, i.e. promoting high-quality development of urban clusters, accelerating the policies for ECER, and paying more attention to economic growth, resource allocation, internet technology, and employment structure.