TY - JOUR
T1 - The impact of the new energy demonstration city construction on energy consumption intensity: Exploring the sustainable potential of China's firms
AU - Liu, Xiaoqian
AU - Wang, Chang'an
AU - Wu, Haitao
AU - Yang, Cunyi
AU - Albitar, Khaldoon
PY - 2023/11/15
Y1 - 2023/11/15
N2 - As a comprehensive energy transition reform strategy, China's new energy demonstration city (NEDC) pilot policy aims to accelerate the transformation from a fossil fuel-based energy system to a more sustainable energy system. Employing unique data on firms' energy consumption from National Tax Survey Database, this paper investigates how NEDC policy affects firms' energy utilization efficiency based on the difference-in-differences model. We observe that NEDC construction reduces firms' energy consumption intensity (ECI) in the pilot cities. After using the instrumental variable approach to deal with endogeneity problems, the conclusions still hold. The mechanism analysis reveals that the decrease in firms' ECI is driven by offering more tax incentives to enterprises and prompting them to pursue technological innovation. Heterogeneity analysis shows that this negative impact is more prominent for SOEs and high-energy-consuming enterprises; we also observe that this effect is more pronounced for firms in resource-based cities and old-industrial-based cities. Our results provide policy implications for initiating policies in other countries to improve firms' energy utilization performance.
AB - As a comprehensive energy transition reform strategy, China's new energy demonstration city (NEDC) pilot policy aims to accelerate the transformation from a fossil fuel-based energy system to a more sustainable energy system. Employing unique data on firms' energy consumption from National Tax Survey Database, this paper investigates how NEDC policy affects firms' energy utilization efficiency based on the difference-in-differences model. We observe that NEDC construction reduces firms' energy consumption intensity (ECI) in the pilot cities. After using the instrumental variable approach to deal with endogeneity problems, the conclusions still hold. The mechanism analysis reveals that the decrease in firms' ECI is driven by offering more tax incentives to enterprises and prompting them to pursue technological innovation. Heterogeneity analysis shows that this negative impact is more prominent for SOEs and high-energy-consuming enterprises; we also observe that this effect is more pronounced for firms in resource-based cities and old-industrial-based cities. Our results provide policy implications for initiating policies in other countries to improve firms' energy utilization performance.
KW - Energy consumption intensity
KW - Energy utilization efficiency
KW - New energy demonstration city pilot policy
KW - Tax incentives
KW - Technological innovation
UR - http://www.scopus.com/inward/record.url?scp=85167804322&partnerID=8YFLogxK
U2 - 10.1016/j.energy.2023.128716
DO - 10.1016/j.energy.2023.128716
M3 - Article
AN - SCOPUS:85167804322
SN - 0360-5442
VL - 283
JO - Energy
JF - Energy
M1 - 128716
ER -