The impact of environmental regulation policy on firms' energy-saving behavior: A quasi-natural experiment based on China's low-carbon pilot city policy

This paper explores the impact of environmental regulations on firms' energy-saving behavior by employing a quasi-natural experiment—China's low-carbon pilot (LCP) city policy. Using firm-level data and adopting a difference-in-differences (DID) model, we estimate the impact of China's LCP city policy on heterogeneous firms' energy conservation. The results show that the policy significantly reduces firms' coal consumption and coal intensity. In particular, energy-intensive industries and state-owned enterprises (SOEs) undertake larger energy conservation tasks. The effect on overall energy efficiency and the long-term effects are not as good. Our findings enrich existing research at the micro-level and have implications for authorities in China and other countries to propose environmental regulations.