Does Urban Renewal Help Reduce Carbon Emissions? Empirical Evidence from Chinese Cities

This study considers China’s ongoing Urban Old Residential Community Renovation Pilot Policy (UORCRPP), one of the important policies for urban renewal (UR), as a quasi-natural experiment, and uses a sample of 283 urban panel data from Chinese cities to examine the impact and influential mechanisms of UR on urban carbon emissions (UCE) by applying the difference-in-differences (DID) model. Our findings reveal that UR significantly reduces UCE, a conclusion supported by a series of robustness analyses. UR achieves this reduction in UCE through four transmission mechanisms: infrastructure development, growth in the productive service sector, resource allocation, and economic agglomeration. Furthermore, UR exerts a more pronounced inhibitory effect on carbon emissions in small-scale cities, cities in the central and western regions, and those not reliant on resource-intensive industries. Additionally, UR demonstrates a stronger carbon reduction effect in cities not designated as low-carbon pilot cities, non-participants in new urbanization pilot programs, and cities not involved in innovation-focused pilot initiatives. UR also exhibits a significant negative spatial spillover effect on surrounding regions, with this effect taking on a “U”-shaped pattern as distance thresholds increase. The maximum negative spatial spillover effect is observed at a distance of 200 kilometers.