How has China's urban compactness affected urban CO2 abatement costs?

While many studies highlight the substantial emissions reduction potential of compact urban structures, their economic implications for carbon abatement are often overlooked. Unlike conventional approaches that focus solely on emissions, the concept of the marginal carbon abatement cost offers a more comprehensive framework, addressing both emissions reduction and broader economic impacts. This research applies a convex quantile regression method to account for factors such as low efficiency, noise interference, and overlooked emission reduction potential, which tend to overestimate the marginal carbon abatement cost. The results indicate that the average urban marginal carbon abatement cost in Chinese cities is 222.47 yuan/ton. This research first measure urban compactness and urban marginal carbon abatement cost across Chinese cities, respectively, and then explore the nexus between them. The findings reveal a statistically significant negative relationship, supported by robustness tests. Mechanism analysis suggests that this impact is driven by technological innovation and industrial structure optimization. The reduction in abatement costs is more pronounced in western cities, medium- and small-sized cities, and cities less dependent on resource-based industries. This study provides insights into compact urban development and offers a new perspective on carbon reduction strategies.