Will the Special Economic Zone contribute to carbon neutrality? Quasi-natural experimental evidence from China

ABSTRACT

Many studies have explored the impact of China Special Economic Zone (SEZ) on economic growth, but few have paid attention to its impact on environmental pollution. Taking the establishment of SEZ as a quasi-natural experiment in China, this paper used the time-varying difference-in-difference method to explore the impact of industrial agglomeration caused by SEZ on CO2 emission from 1998 to 2011. The results showed that the industrial agglomeration would aggravate CO2 emissions, while effective regulatory measures in SEZ can reduce CO2 emissions. The policy emission reduction effect was significant in non-urban agglomerations and before 2006. To reduce CO2 emissions and achieve the goal of carbon neutrality, the local government should supervise and manage industrial agglomeration effectively.

KEYWORDS:

• Special Economic Zone
• the spatial agglomeration of enterprises
• CO2 emission
• time-varying difference-in-difference

JEL CLASSIFICATION:

• R58
• R00
• Q50

Highlights

• Using the time-varying DID method, this paper investigates the impact of industrial agglomeration caused by the China’s Special Economic Zone on CO2 emissions from 1998 to 2011.

• This paper also measures industrial agglomeration using the traditional index, the enterprise density per unit and compares the effect of the enterprise density and the policy effect of China’s Special Economic Zone on CO2 emission.

• The industrial agglomeration would aggravate CO2 emissions, while effective regulatory measures in Special Economic Zone can reduce CO2 emissions.

• The policy emission reduction effect was more significant in non-urban agglomerations and before 2006.

Acknowledgments

The authors appreciate the anonymous reviewers for their constructive comments.

Disclosure statement

No potential conflict of interest was reported by the author(s).