**1. Introduction**

Air pollution, from sources such as climate anomalies, melting glaciers, and haze, has become an important issue around the world. China, as the world's largest emitter of CO2 and SO2 [1,2], is facing serious domestic environmental pollution problems and tremendous international community pressure [3]. In 2021, China committed to peaking its carbon emissions by 2030 and becoming carbon neutral by 2060. Therefore, the question of how to balance economic development and ecological protection has become an important issue. The city cluster policy can provide a potential solution. the city cluster is not only the most promising and dynamic area in China's economic development, but also the area with the highest concentration of ecological and environmental problems. The city cluster will have a profound impact on regional resource utilization and environmental protection, but it is not clear through which specific path. These are issues of interest to many cities and economists.

How to reduce carbon emissions is a crucial issue for sustainable development. The Chinese government has established a series of environmental regulation policies, such as the Air Pollution Prevention and Control Action Plan in 2013, which is also noted as China's Clean Air Action [4–6], carbon emission trading system in 2014 [7–10], and so on. Although previous scholars have discussed the air governance effect of environmental

**Citation:** Li, X.; Huang, C.; Zhan, S.; Wu, Y. The Carbon Emission Reduction Effect of City Cluster—Evidence from the Yangtze River Economic Belt in China. *Energies* **2022**, *15*, 6210. https:// doi.org/10.3390/en15176210

Academic Editor: Donato Morea

Received: 22 July 2022 Accepted: 19 August 2022 Published: 26 August 2022

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regulation [11,12], they have seldom exploited the environmental effect of a city's spatial layout [13,14], especially the impact of the city cluster on carbon emission reduction. Therefore, to fill academic gaps, this paper will examine the impact of the city cluster policy on carbon emissions, based on the sample of China's Yangtze River Economic Belt.

Based on city-level panel data from 108 Chinese cities in the Yangtze River Economic Belt between 2003 and 2017, this paper examines the impact of city cluster policy on carbon emissions using the difference-in-differences (DID) method. We found that: (1) The city cluster policy has significantly reduced the cities' carbon emissions, with an average reduction of 7.4% in city carbon emissions; furthermore, after a series of robust and endogenous tests, such as parallel trend and PSM-DID, the core conclusion still remains. (2) We further identify possible economic channels through this effect, and find that city cluster policy would increase city productivity, city technological innovation, and industrial structure optimization. (3) The emission reduction effect of the city cluster policy only exists in the nation's city clusters.

There are three reasons why we choose China as the background to study the impact of city clusters on carbon emission reduction. First, China is the world's most populous country and the world's second-largest economy. It is of practical significance to evaluate the impact of carbon trading pilot policies. Secondly, China is the largest carbon emission emitter and an emerging country [15]. Conclusions from such research on China may provide a useful reference for other developing countries to implement carbon trading pilot programs. Finally, China is a centralized country that adopts a vertical management and organizational structure. The environmental policies are initially formulated by the central government of China, and then implemented by local governments, which ensures the exogenous nature of the policy. In addition, there are 30 provinces in China, allowing us to use this cross-sectional variation to determine the policy effect of the city cluster.

There are two main contributions to this paper. For one thing, this paper has a potential academic contribution. Previous scholars have discussed the air governance effect from the perspective of environmental regulation [4–6], but they have seldom discussed the city's spatial layout. In this paper, we use China's city cluster policy in 2011 to examine the effect of city integration on carbon emissions. For another thing, this paper has strong policy implications. Based on China's city cluster policy in 2011, this paper examines the effects of the city cluster on carbon emissions. We found that the city cluster will reduce carbon emissions. The conclusions provide useful policy implications for policy-makers to reduce city carbon emissions. Rich results from a heterogeneity analysis provide policy-makers with an understanding of economic facts, and point out the direction for improving the carbon trading system.

The rest of the paper is organized as follows: the second part is the theoretical analysis, the third part presents the data and empirical design, the fourth part presents the empirical results, the fifth part is the further discussion, and the sixth part consists of the conclusions and policy implications.
