The impact and spatial externalities of unstable power supply on the low-carbon transition in China

Abstract

This study constructs a novel city-level power supply instability index in China by using a text mining method, and investigates the impacts and spatial externalities of unstable power supply on the low-carbon transition in China. The findings show that an unstable power supply significantly hinders the low-carbon transition of Chinese cities and exhibits strong spatial spillover effects. Furthermore, there is significant regional heterogeneity, with stronger impacts on non-resource-based cities, industrial cities, and economically developed cities. Examinations into the mechanisms uncover that the instability of the power supply primarily impacts the city's low-carbon transition by impeding innovation in green technologies and industrial agglomeration. Additionally, the hindrance to low-carbon transition in neighboring cities is primarily demonstrated by an increase in the intensity of foreign direct investments in those nearby areas. Policy makers must not only pay attention to the hindrance of unstable power supply to the local low-carbon transition but also be aware of the spillover effect of this inhibitory effect from neighboring cities.