The Impact of New Energy Vehicle Pilot Policies on Urban Green Transition in China

Abstract

Against the backdrop of carbon peaking and carbon neutrality targets alongside the drive for high-quality urban development, the rollout of new energy vehicle pilot initiatives has become a core pathway to facilitate low-carbon transition in the transport sector. China launched the demonstration and promotion pilot policies for NEVs in 2009. Based on the externality theory, Porter Hypothesis, and financial resource allocation theory, this paper analyzes how different stakeholders respond to policy shocks and systematically elaborates on the internal mechanism through which NEV pilot policies affect urban green transition. It thoroughly clarifies the inherent transmission channels through which NEV trial policies reshape urban low-carbon development. Using a multi-period difference-in-differences (DID) framework with panel data spanning 282 cities from 2003 to 2022, the findings indicate that pilot policies have significantly enhanced the urban green transition in China. However, this positive effect is predominantly driven by improvements in green technical efficiency (GTE), while the policy’s impact on green technological progress (GTP) is notably weaker. The effects of these policies exhibit regional heterogeneity: the marginal gains generated by the trials turn out to be more substantial within central and western China, as well as in resource-growing and regenerative cities. Further tests reveal that green technological innovation and financial support positively moderate the impact of new energy vehicle pilot policies on urban green transition.