New energy demonstration city and urban pollutant emissions: An analysis based on a spatial difference-in-differences model

If new energy is developed and utilised reasonably, it can promote green economic growth and reduce carbon emissions. However, the evidence for the effectiveness of New Energy Demonstration City (NEDC) in reducing pollutant emissions is limited. Therefore, based on panel data from 256 cities in China from 2011 to 2020, using a quasi-natural experiment of NEDC, this study uses the Spatial Difference-in-Differences (SDID) model to evaluate the impact of this policy on Environmental Pollution Emissions (EPE) in cities. It is observed that the construction of NEDC significantly reduces the EPE, and there is a significant negative spillover effect on neighbouring cities. Importantly, there is a heterogeneity in this emission reduction effect, with stronger effects in the central and western regions and small and medium-sized cities. To further clarify the mechanisms between them, this study uses a moderating effect model to investigate the role of government financial support and technological innovation. And find that the moderating effect of both is negative. This research provides policy and management recommendations for further promoting the construction of NEDC and reducing pollutant emissions in China.