Can the new energy demonstration city policy reduce environmental pollution? Evidence from a quasi-natural experiment in China

The New Energy Demonstration City policy (NEDC) is an important pilot measure to promote the in-depth advancement of the ecology in China. Objectively evaluating its effect on environmental pollution is greatly significant in the development of this policy. The difference-in-differences method and the mediation model are employed to analyze the effect and mechanism of the NEDC on the urban environmental pollution on the basis of 271 cities in China from 2005 to 2016. Results show that the NEDC has significantly reduced environmental pollution. Specifically, the NEDC has significantly reduced approximately 28.83% of exhaust gas emissions and 12.88% of wastewater emissions. The conclusion that the NEDC can significantly reduce environmental pollution is still valid after the endogenous problems have been alleviated and robustness tests have been carried out. The NEDC can also reduce environmental pollution through technological innovation effect, structure effect, and resource allocation effect. The effect of technological innovation is the strongest, followed by resource allocation and industrial structural effect, respectively. Moreover, compared with the western region and small-scale cities, the effect of the NEDC on regional environmental pollution is more significant in the eastern and central regions and medium-sized and above cities. This study provides evidence for China to promote the construction strategy of new energy demonstration city further and improve the construction quality of new energy demonstration city. This article also provides guidance for the promotion of new energy demonstration cities construction and in-depth research and development of new energy technology.