Does smart city policy promote sustainable cities? Exploring the co-benefits of smart city policy on carbon reduction, pollution mitigation and economic growth

Exploring the effects of smart city policy is important for cities’ sustainable development. We use the panel data of 274 Chinese cities from 2006 to 2020 to examine the impacts and co-benefits of smart city policy. We found that the smart city policy can realize the multi-win in carbon reduction, pollution mitigation and economic growth in pilot cities. We further examined the mechanisms and found that the smart city policy achieves both environmental and economic benefits by way of upgrading industrial structure, promoting green innovation and digital industrialization. Smart city policy has significant heterogeneous effects. The environmental effect of smart city policy is more significant in western areas and in resource-based cities, while the growth effect is larger in large cities. Our study suggests the smart city policy should be implemented according to local conditions for reducing growth and environmental risk, although it has co-benefits overall.HIGHLIGHTSWe test the impacts of smart city policy on sustainable growth.Smart city policy realizes environment sustainability and economic growth.Industrial upgrading and digitalization are the mechanisms.Synergetic policy is needed to promote the co-benefits of smart city.