When carbon policy meets sulfur policy: How environmental policy portfolios enhance green productivity in Chinese cities

Focusing on the intersection of carbon and sulfur control policies in Chinese cities, the effect of coupled environmental regulations on green productivity is examined in this study. We exploit a quasi-natural experiment from 2006 to 2019, using the Low-Carbon City Pilot (LCCP) program in conjunction with sulfur dioxide (SO2) reduction mandates. Employing the difference-in-differences (DID) technique, we discover that the LCCP program results in a 3.5% improvement in green productivity. Approximately half of this effect is attributable to the SO2 reduction targets. These results underscore the importance of policy interaction in shaping environmental and economic outcomes. Mechanism analysis reveals heterogeneous transmission channels. The LCCP program improves green productivity primarily by reducing energy input. In contrast, SO2 reduction targets are more effective in promoting end-of-pipe pollution control technologies. Importantly, the joint policy implementation does not hinder economic growth. Our findings contribute to the literature on environmental policy design under multi-pollutant frameworks. In the context of China's carbon neutrality agenda, they highlight the value of coordinated policy portfolios.