The effect of industrial upgrading on energy consumption

Abstract

Energy conservation is a key way for China to achieve the goal of “carbon peaking” and “carbon neutrality” goals. Based on the panel data of 152 resource-based and old industrial cities (RBOI cities) in China from 2010 to 2021, this study explores the effect of national industrial transformation and upgrading demonstration zones (ITUDZ) on city's energy consumption and its mechanism channel using a time-varying difference-in-differences method. The results show that: (1) The ITUDZ significantly reduce the city's energy consumption. And the result still robust after a series of robustness tests. (2) Mechanism analyses show that the ITUDZ mainly rely on optimizing the industrial structure and improving the green innovation to reduce energy consumption. Moreover, this energy-saving effect can be enhanced by the market-oriented reform. (3) Heterogeneity analyses find that the energy-saving effect of ITUDZ on the eastern China and multi-city zones are significantly stronger than that of the central-western China and single-city zones. This study provides new evidence to understand the effect of industrial place-based policy on energy conservation. It provides a reference for the realization of green development in China.

Keywords

• Industrial transformation and upgrading demonstration zones
• Energy consumption
• Resource-based and old industrial city
• Difference-in-differences method