How does the marketization of urban land transfer reduce carbon emissions? Insights from China

Abstract In the context of China's market‐oriented transformation, the marketization of urban land transfer (MULT) plays an important role. However, the intrinsic link between MULT and carbon emissions remains unclear. This study aims to revise the assessment methodology of MULT using large‐scale land transaction record data and tested its impact on carbon emissions at the city level. The results indicate that the competitive bidding mechanism of MULT suppresses “bottom line” competition between local authorities and has beneficial effects on carbon emissions reduction. Further analysis shows that MULT has indirectly reduced carbon emissions by industrial structure optimization. The heterogeneity test showed that the effectiveness of MULT on carbon emissions varies significantly across cities with different levels of resource endowment and location. The lag effect test shows that MULT has a negative impact on carbon emissions in the current year and second year but is no longer significant in the third year. This research expands the understanding of the intrinsic link between institutional and sustainable development, providing new insights and policy rationale for mitigating the environmental crisis.