Is high-speed rail heading towards a low-carbon industry? Evidence from a quasi-natural experiment in China

Existing studies have investigated the environmental dividends of substituting high-speed rail (HSR) for other energy-intensive vehicles from an engineering standpoint, but they have yet to explore the economic effects of HSR and the associated carbon emissions reduction benefits. To fill the research gap, we use panel data from 285 Chinese cities between 2004 and 2014, and employ a spatial difference-in-differences model to empirically examine the impact of HSR opening on industrial CO2 emissions. After controlling for spillover effects from neighboring HSR cities, our results show that cities offering HSR services significantly reduce their own industrial CO2 emissions. This finding is robust and is unaffected by outliers, control group selection, time trends, geography and expectation factors, or endogeneity. The mechanism test reveals that the structural transformation effect, technological innovation effect, and investment attractiveness effect are three intermediate influence channels. Further research finds that the emissions reduction benefit increases as the spatial and temporal intensities of HSR openings ascend the ladder, and HSR services have a spillover effect within a 300-kilometer radius. Moreover, the carbon benefit of China’s HSR far surpasses its carbon footprint, indicating that China’s HSR is green after accounting for economic emissions reductions that were often neglected in prior research. Based on these findings, we recommend that China accelerate HSR expansion in order to reduce carbon emissions in a scientific and responsible manner.