"Reward or Regulation?" - Carbon Emission Reduction Effects of Green Fiscal Policy

Abstract

This paper assesses the carbon reduction effects of government green fiscal policy by focusing on the construction of "comprehensive demonstration cities for energy conservation and emission reduction". The study employs staggered Difference-in-Differences (DID) and Two-Stage DID to measure the carbon reduction effect, and the heterogeneity in the construction of three batches of demonstration cities is taken into consideration. The results indicate that the construction of demonstration cities significantly reduces local carbon emission intensity and per capita carbon emissions, mainly due to the improvement of energy efficiency. Overall, this study offers valuable insights for the development of effective green fiscal policies targeting energy conservation and emission reduction effect. It provides valuable insights for achieving green and low-carbon development by promoting mutual interactions between environmental protection and economic growth in the future.