Marginal abatement cost of urban emissions under climate policy: Assessment and projection for China's 2030 climate target

Zhang, Yixuan, Zhu, Xiangjie, Liu, Di, Shan, Yuli and Wu, Yi 2025. Marginal abatement cost of urban emissions under climate policy: Assessment and projection for China's 2030 climate target. Sustainable Cities and Society 124 , 106319. 10.1016/j.scs.2025.106319

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Abstract

This study evaluates the effectiveness of Low-Carbon City Pilot programme and predicts its future trajectory through 2030, using the marginal abatement cost of CO2 as the outcome indicator to address policy anticipation effects. Drawing on Chinese city-level panel data (2006–2019), we estimate and forecast marginal abatement cost through a hybrid approach combining machine learning regression, autoregressive integrated moving average and quadratic directional distance function. A Difference-in-Differences model is used to assess the policy's impact, while a cost-intensity matrix is employed to explore cities’ low-carbon transition stages and pathways to 2030. The results reveal that Low-Carbon City Pilot programme significantly increased the marginal abatement cost of CO2 in pilot cities, driven by green technology innovation and industrial structure upgrading. These effects are more pronounced in developed, eastern, non-resource-based and non-industrial cities. Under the carbon peaking target, most cities will experience rising abatement costs, with widening inter-city divergence. By 2030, fewer than one-fifth of cities will achieve low-carbon transition, while the majority will remain in mid- or early-transition phrases. We recommend exploring emission reduction potential in central, western, and resource-based cities, addressing transition barriers, and formulating city-specific policies that account for unique underlying costs while enhancing synergies to avoid carbon leakage and worsening climate inequality.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Schools > Business (Including Economics)
Publisher:	Elsevier
ISSN:	2210-6707
Date of First Compliant Deposit:	11 December 2025
Date of Acceptance:	18 March 2025
Last Modified:	11 Dec 2025 15:31
URI:	https://orca.cardiff.ac.uk/id/eprint/183152

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