Unlocking the “happiness key” of China's low-carbon city pilots: how policy enhances residents' life satisfaction

In response to global carbon peaking goals, China has introduced the Low-Carbon City Pilot (LCCP) in phases since 2010. While existing studies have extensively evaluated the economic and environmental effects of the LCCP, its impact on social welfare remains underexplored. This study addresses this gap by examining the effects of the LCCP on residents' life satisfaction. Based on a theoretical model, we propose that the LCCP improves life satisfaction through three channels: improved air quality, higher income, and better health levels. Using data from the China Family Panel Studies (CFPS) from 2012 to 2020, we employ an ordered Probit model combined with a multi-period Difference-in-Differences (DID) approach. Empirical results exhibit that the LCCP significantly increases the probability that residents report being "very satisfied" with their lives by 6.41 %, while reducing the likelihood of dissatisfaction. Mechanism analysis confirms that improvements in air quality, income, and health conditions are key drivers. Heterogeneity analysis further demonstrates that the effects are more pronounced among low-income, formal-employed, and self-employed groups. These findings underscore the need to embed visible co-benefits in low-carbon policies, strengthen income-health transmission through targeted reforms, develop inclusive green-welfare institutions for vulnerable groups, and offer practical guidance for low-carbon transitions in other developing economies.