The Synergy of Pollution and Carbon Reduction by Green Fiscal Policy: A Quasi-Natural Experiment Utilizing a Pilot Program from China’s Comprehensive Demonstration Cities of Energy Conservation and Emission Reduction Fiscal Policy

Lei Xu, Shiguang Peng () and Le Wang
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Lei Xu: Research Center of “Agriculture, Rural areas and Farmers” Issues, Jiangxi Agricultural University, Nanchang 330045, China
Shiguang Peng: School of Economics, Yunnan University, Kunming 650500, China
Le Wang: College of Finance, Nanjing Agricultural University, Nanjing 210095, China

Sustainability, 2025, vol. 17, issue 2, 1-16

Abstract: Using data from 2003 to 2019 for China’s 257 cities, this quantitative research utilizes the difference-in-differences approach to evaluate the synergy of the Comprehensive Demonstration Cities of Energy Conservation and Emission Reduction Fiscal Policy on pollution and carbon reduction. The primary results are as follows. The policy successfully reduces total emissions of industrial SO 2 , industrial wastewater, and CO 2 , thus achieving the desired synergistic effect of pollution and carbon reduction. Facilitating green technological innovation and promoting industrial upgrading are the transmission mechanisms through which the synergistic effect of the policy operates. The negative effect of the policy on the total emissions of industrial SO 2 and CO 2 is greater in the eastern area than in the mid-western area and the impact of the policy on decreasing the total emissions of industrial SO 2 is more pronounced in non-resource-based cities compared to resource-based cities. This study provides an empirical reference for green fiscal policy with respect to reducing air pollution, wastewater pollution, and greenhouse gas emissions.

Keywords: pollution and carbon reduction; green fiscal policy; green industrial upgrading; technological innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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