*4.1. The Effect of City Cluster Policy on CO2 Emissions*

The estimated results of Equation (1) are shown in Table 3. It can be seen that the coefficient estimates of Treat\*Post are significantly negative, suggesting that city carbon emissions have decreased after the city cluster policy. This negative impact has economic implications. For example, during our sample period, carbon emissions from cities declined by an average of 7.4% after cities were classified as a city cluster. This result supports our previous hypothesis. The path of the effect may come from the positive impact of the city cluster on production efficiency, technological innovation ability and the rationalization of industrial structure, which will be further examined in this paper. To sum up, the city cluster policy helps cities reduce carbon emissions.

**(1) (2) LnCO2 LnCO2** Treat\*Post −0.099 \*\*\* −0.074 \*\*\* (−6.235) (−5.032) LnGDP 0.405 \*\*\* (5.486) Open 0.580 \* (1.746) Finance 0.056 \* (1.879) Gov 0.196 (1.249) Sec\_Ind 0.070 (0.409) Thi\_Ind 0.043 (0.202) Constant 2.736 \*\*\* −3.975 \*\*\* (418.071) (−3.311) City FE YES YES Year FE YES YES Observations 1620 1620 Adj\_R2 0.957 0.959

**Table 3.** The effect of city cluster policy on CO2 emissions.

Note: *t* statistics are shown in parentheses; \*\*\* and \* represent significance at the 1%, and 10% levels, respectively. All variable definitions are in Table 1. The sample period covers 2003 through 2017. Regressions in all columns control for year-fixed effects and city-fixed effects.
