For a sustainable landscape of local economies, many researchers have emphasized the importance of field-oriented differentiation in government policies. In particular, the Paris Agreement, based on the bottom-up approach, aims to maximize the participation of all economic agents, in contrast to the top-down approach of the Tokyo Protocol. In response to these global paradigm shifts in the local landscape, local governments in Korea have made significant efforts to adapt to sustainable development during the pilot phase of emission trading scheme (ETS), during the period from 2015 to 2020. This study evaluates the performance of these local government policies in the transition to a carbon-zero economy. Using the general non-radial directional distance function (GNDDF), we found that Gyeongsang Province demonstrated enhanced environmental total factor productivity (TFP) during the pilot project, whereas the Seoul metropolitan area lagged behind due to a lack of governance. As the economic center of Korea, Seoul showed poor environmental performance because of the arbitrary elimination of green belt areas and unchecked land development, resulting in environmental degradation, a trend common in many developing countries facing climate adaptation challenges. To address these urbanization issues, this study concludes that a balanced approach combining stricter regulations with market-oriented promotional incentives is essential for optimizing the transition of local economies to a sustainable landscape.

The commitment to peak carbon emissions before 2030 and the goal of achieving carbon neutrality by 2060 have placed carbon emission efficiency (CEE) at the center of China’s low-carbon development strategy. Although national policies have promoted energy conservation and technological upgrading, substantial heterogeneity in CEE persists across cities of different administrative and economic tiers. To examine this heterogeneity, we construct a city-level CEE index based on a stochastic frontier analysis (SFA) framework that explicitly treats CO₂ emissions as an undesirable output. Based on a panel dataset covering 274 prefecture-level cities grouped into five categories from 2006 to 2022, we find that first-tier cities such as Shanghai and Beijing, with advanced technological capacity and strong support by the emission trading scheme (ETS), have shown an upward trend in improving their CEE, while middle-range cities remain locked in carbon-intensive trajectories. In particular, the lowest-level fifth-tier cities show a decreasing trend, implying a bipolarization of urbanization among cities. To address this bipolarization by urbanization, we examine the governance mechanisms of CEE using a second-stage Tobit model and find that governance factors related to urbanization—such as high labor quality and intensive land development in larger cities—have contributed to the widening gap in CEE. This implies that mitigating the negative consequences of urbanization is essential for achieving a carbon-neutral economy.