Towards sustainable development: the spatial spillover effects of low-carbon city pilot policy on urban energy transition

The Low-Carbon City Pilot (LCCP) policy is a significant project in the global effort to transition towards sustainable energy, addressing both energy security and climate change concerns. The geographical spillover impacts of LCCP policy on energy transition, however, have not received much attention in research. This study by analyzing data from 277 cities from 2006 to 2020, using a Spatial Difference-In-Differences (SDID) model to explore the LCCP policy’s spatial spillover effects. Furthermore, in order to investigate the heterogeneity in various types of cities and assess the policy’s mechanism through factor aggregation, this study presents a spatial mediation effect model. Empirical evidence reveals that the LCCP policy promotes urban energy transition in the region. However, it also generates negative spatial spillovers in neighboring cities, a result that remains robust even under rigorous testing. Mechanism analysis identifies three pathways facilitating urban energy transition: capital aggregation, technology aggregation, and industry aggregation. Further, heterogeneity analysis shows the LCCP policy’s impact varies among eastern cities, resource-based cities, and first and second-tier cities. This research contributes valuable insights for policy-making, aimed at promoting the progress of low-carbon cities and accelerating the global energy transition.