Strategic interactions in urban carbon reduction: a perspective of peer effect

Understanding the spatial interaction effects of urban carbon reduction is crucial for formulating coordinated regional mitigation strategies. Drawing on panel data from 284 Chinese cities covering the period 2006–2020, this study employs a spatial econometric framework within the context of peer effects to empirically examine the interactive characteristics of urban carbon reduction. The results reveal that: (1) urban carbon reduction exhibits significant positive peer effects, with the strongest “yardstick competition” observed among cities located within the same province; (2) mechanism tests indicate that both learning and competition effects reinforce these peer effects; (3) cities with varying emission intensities tend to learn from and emulate each other’s urban carbon reduction practices, with those of lower intensities more likely to serve as role models; and (4) heterogeneity analysis shows that peer effects are more pronounced among cities in central and western China, particularly in low-carbon cities, and that non-resource-based cities tend to exhibit stronger peer effects than resource-based cities. These findings suggest that policymakers should strengthen inter-city linkages to amplify the collective effectiveness of urban carbon reduction.