1 + 1 > 2? The synergistic effect of carbon emissions reduction policies: empirical evidence from China

The low-carbon city pilot policy (LCCPP) and the carbon emissions trading pilot policy (CETPP) are important measures for China to reduce its carbon emissions. However, the existing literature typically focuses narrowly on the effect of a single policy tool, leaving it unclear whether the LCCPP and CETPP are in conflict or complementary. Therefore, we investigated the synergistic effect of the LCCPP and CETPP in China using the difference-in-differences (DID) method. Compared with the 5.4% reduction of the LCCPP and the 5.1% reduction of the CETPP, the dual pilot policy (DPP) can improve the carbon emissions reduction effect to 11.9%. However, the effect of the DPP takes time to become apparent owing to a policy lag. The DPP primarily achieves its effect by promoting technological progress and optimizing energy allocation. In addition, the carbon emissions reduction effect of the DPP is more evident in large, high-ranking, and resource-based cities. Our work can help policymakers fully consider the coordination between future climate policies and design reasonable mixed policy tools. Reducing carbon emissions requires collaborative efforts between the LCCPP and CETPP. Thus, the Chinese government should strengthen the synergy between these two policies to avoid policy crossover, repetition, and conflict.The Chinese government should clarify the policy objectives of the LCCPP and CETPP, enhance the link between the market and the government, and effectively reduce carbon emissions through government support and market screening.The coverage of the LCCPP and CETPP should be expanded and effective policy operation mechanisms and regulatory systems should be established.Large cities should establish more low-carbon funds to promote the implementation of the LCCPP and CETPP. High-ranking cities should leverage commercial resources to design more low-carbon application scenarios. Resource-based cities should view the LCCPP and CETPP as crucial for industrial transformation and seek new economic growth pathways based on low-carbon development principles. Reducing carbon emissions requires collaborative efforts between the LCCPP and CETPP. Thus, the Chinese government should strengthen the synergy between these two policies to avoid policy crossover, repetition, and conflict. The Chinese government should clarify the policy objectives of the LCCPP and CETPP, enhance the link between the market and the government, and effectively reduce carbon emissions through government support and market screening. The coverage of the LCCPP and CETPP should be expanded and effective policy operation mechanisms and regulatory systems should be established. Large cities should establish more low-carbon funds to promote the implementation of the LCCPP and CETPP. High-ranking cities should leverage commercial resources to design more low-carbon application scenarios. Resource-based cities should view the LCCPP and CETPP as crucial for industrial transformation and seek new economic growth pathways based on low-carbon development principles.