The effects and mechanisms of environmental policies have always been an important academic topic in environmental governance research. This article takes the external effects of low-carbon city pilot as the research perspective, and based on panel data of 285 prefecture level cities from 2006 to 2019, uses the staggered DID model to explore the impact and mechanism of low-carbon city pilot policies on carbon emissions of peer cities. Research has found that there is a significant “peer effect” in low-carbon city pilot policies, which is achieved through three mechanisms: spontaneous government governance, inducing green innovation in enterprises, and driving public behavior; Heterogeneity analysis shows that cities with good economic conditions, non resource-based cities, low carbon emission bases, and high promotion probability are more sensitive to the “peer effect”; The moderating effect of “peer effect” is based on the quantity and quality of low-carbon city pilot in the surrounding areas, which transmit regulatory pressure to neighboring city governments, thereby incentivizing peer cities to reduce carbon emissions. After distinguishing the sources of peer pressure, it was found that the “peer effect” came more from the “scale competition” of pilot cities within the same province.