Do smart city policies improve energy efficiency? Evidence from China

Abstract

To address air pollution and offer a convenient and comfortable living environment, the Chinese government launched a smart city pilot (SCP) project in 2012, accompanied by a comprehensive set of environmental and energy-related laws and regulations. Although academic interest in smart cities has surged, there remains a notable gap in empirical research exploring the economic, environmental, and energy effects of such initiatives. Taking 232 prefecture-level cities from 2003 to 2017 as research subjects, this study measures energy efficiency by using energy consumption per unit of GDP and adopts a difference-in-differences (DID) analysis to investigate the impact of SCPs on energy efficiency. The empirical results indicate that SCPs improved energy efficiency by promoting urban technological innovation capabilities and green total factor productivity, and this effect was more pronounced in cities that were more dependent on traditional fossil fuel energy sources and had more developed fiscal and financial levels. Studying the impact of smart city construction on energy utilization efficiency in developing countries, such as China, is not only significantly enlightening for China’s green and low-carbon transition but also provides reference opinions for constructing smart cities and the path to enhancing energy efficiency in other developing countries. The findings provide valuable insights into the global development of smart cities, urban sustainability, and high-quality economic growth.

Keywords

• Smart city project
• Energy efficiency
• Legislation on environment and energy
• Technological innovation capabilities
• Green total factor productivity
• Difference-in-differences