IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v339y2025ics0360544225046031.html

Green fiscal policies, economic growth target constraints and carbon emission efficiency: Evidence from DID and double machine learning

Author

Listed:
  • Jiang, Hongli
  • Hu, Wenjie
  • Hou, Yan
  • Jiang, Pengcheng
  • Lu, Na

Abstract

Green fiscal policies are vital for low-carbon transition. Economic growth target (EGT) management plays an important role in economic development. Nevertheless, few literatures have investigated their impact on carbon emission efficiency (CEE) in a unified frame. This study investigates the influence mechanism of green fiscal policies on CEE, the impact of the interplay between green fiscal policies and EGT constraints on CEE, and the role of digital infrastructure, by using staggered DID approach and double machine learning (DML) approach. The results reveal that green fiscal policies enhance CEE through promoting low-carbon technology innovation, improving energy efficiency, and facilitating industrial structure upgrading. The enhancing effect of green fiscal policies on CEE is more pronounced in cities with higher human capital, higher government environmental concern, and lower government fiscal pressure. Hard EGT constraints and top-down amplification of EGT weaken the positive effect of the green fiscal policies on CEE. Furthermore, green fiscal policies and digital infrastructure construction synergistically promote CEE, and digital infrastructure construction mitigates the constraining effect of EGT on the positive relationship between green fiscal policies and CEE. This study provides important insights from the perspective of policy and institutional synergy for governments to promote low-carbon economic development.

Suggested Citation

  • Jiang, Hongli & Hu, Wenjie & Hou, Yan & Jiang, Pengcheng & Lu, Na, 2025. "Green fiscal policies, economic growth target constraints and carbon emission efficiency: Evidence from DID and double machine learning," Energy, Elsevier, vol. 339(C).
    • Handle: RePEc:eee:energy:v:339:y:2025:i:c:s0360544225046031
    DOI: 10.1016/j.energy.2025.138961
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544225046031
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2025.138961?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Nina Czernich & Oliver Falck & Tobias Kretschmer & Ludger Woessmann, 2011. "Broadband Infrastructure and Economic Growth," Economic Journal, Royal Economic Society, vol. 121(552), pages 505-532, May.
    2. Hong, Junjie & Shi, Fangyuan & Zheng, Yuhan, 2023. "Does network infrastructure construction reduce energy intensity? Based on the “Broadband China” strategy," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    3. Du, Zhili & Wang, Yao, 2022. "Does energy-saving and emission reduction policy affects carbon reduction performance? A quasi-experimental evidence in China," Applied Energy, Elsevier, vol. 324(C).
    4. Clément de Chaisemartin & Xavier D'Haultfœuille, 2020. "Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects," American Economic Review, American Economic Association, vol. 110(9), pages 2964-2996, September.
    5. Carlsen, Fredrik & Langset, Bjorg & Rattso, Jorn, 2005. "The relationship between firm mobility and tax level: Empirical evidence of fiscal competition between local governments," Journal of Urban Economics, Elsevier, vol. 58(2), pages 273-288, September.
    6. Hainmueller, Jens, 2012. "Entropy Balancing for Causal Effects: A Multivariate Reweighting Method to Produce Balanced Samples in Observational Studies," Political Analysis, Cambridge University Press, vol. 20(1), pages 25-46, January.
    7. Chai, Jian & Tian, Lingyue & Jia, Ruining, 2023. "New energy demonstration city, spatial spillover and carbon emission efficiency: Evidence from China's quasi-natural experiment," Energy Policy, Elsevier, vol. 173(C).
    8. Chen, Jiachun & Chen, Xia & Hou, Qingsong & Hu, May, 2021. "Haste doesn't bring success: Top-down amplification of economic growth targets and enterprise overcapacity," Journal of Corporate Finance, Elsevier, vol. 70(C).
    9. Guo, Qiu-tong & Dong, Yong & Feng, Biao & Zhang, Hao, 2023. "Can green finance development promote total-factor energy efficiency? Empirical evidence from China based on a spatial Durbin model," Energy Policy, Elsevier, vol. 177(C).
    10. Teng, Xiangyu & Liu, Fan-peng & Chiu, Yung-ho, 2021. "The change in energy and carbon emissions efficiency after afforestation in China by applying a modified dynamic SBM model," Energy, Elsevier, vol. 216(C).
    11. Tajudeen, Ibrahim A. & Wossink, Ada & Banerjee, Prasenjit, 2018. "How significant is energy efficiency to mitigate CO2 emissions? Evidence from OECD countries," Energy Economics, Elsevier, vol. 72(C), pages 200-221.
    12. Tang, Pengcheng & Jiang, Qisheng & Mi, Lili, 2021. "One-vote veto: The threshold effect of environmental pollution in China's economic promotion tournament," Ecological Economics, Elsevier, vol. 185(C).
    13. Lin, Boqiang & Zhu, Junpeng, 2019. "Impact of energy saving and emission reduction policy on urban sustainable development: Empirical evidence from China," Applied Energy, Elsevier, vol. 239(C), pages 12-22.
    14. Christopher R. Knittel & Samuel Stolper, 2021. "Machine Learning about Treatment Effect Heterogeneity: The Case of Household Energy Use," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 440-444, May.
    15. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    16. Fukuyama, Hirofumi & Weber, William L., 2009. "A directional slacks-based measure of technical inefficiency," Socio-Economic Planning Sciences, Elsevier, vol. 43(4), pages 274-287, December.
    17. lv, Kangjuan & Pan, Minjie & Huang, Li & Song, Daqiang & Qian, Xinlei, 2023. "Can intellectual property rights protection reduce air pollution? A quasi-natural experiment from China," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 210-222.
    18. Chen, Haiqiang & Lin, Zhe, 2024. "Local fiscal pressure and shadow banking activities of nonfinancial enterprises–A story of government intervention," Finance Research Letters, Elsevier, vol. 62(PB).
    19. Xue, Mingfu & Razzaq, Asif & Afshan, Sahar & Yang, Xiaodong, 2023. "Fiscal pressure and carbon intensity: A quasi-natural experiment based on education authority reform," Energy Economics, Elsevier, vol. 126(C).
    20. Goodman-Bacon, Andrew, 2021. "Difference-in-differences with variation in treatment timing," Journal of Econometrics, Elsevier, vol. 225(2), pages 254-277.
    21. Ding, Chante Jian & Chen, Hang & Liu, Yin & Hu, Jin & Hu, Mingjun & Chen, Dong & Irfan, Muhammad, 2024. "Unleashing digital empowerment: Pioneering low-carbon development through the broadband China strategy," Energy, Elsevier, vol. 295(C).
    22. Jiang, Hongli & Hu, Wenjie & Guo, Ziqing & Hou, Yan & Chen, Tingqiang, 2024. "E-commerce development and carbon emission efficiency: Evidence from 240 cities in China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 586-603.
    23. Ghanem, Dalia & Zhang, Junjie, 2014. "‘Effortless Perfection:’ Do Chinese cities manipulate air pollution data?," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 203-225.
    24. Adams, Samuel & Klobodu, Edem Kwame Mensah & Apio, Alfred, 2018. "Renewable and non-renewable energy, regime type and economic growth," Renewable Energy, Elsevier, vol. 125(C), pages 755-767.
    25. Zhang, Ning & Kong, Fanbin & Choi, Yongrok & Zhou, P., 2014. "The effect of size-control policy on unified energy and carbon efficiency for Chinese fossil fuel power plants," Energy Policy, Elsevier, vol. 70(C), pages 193-200.
    26. Zhou, P. & Ang, B.W. & Wang, H., 2012. "Energy and CO2 emission performance in electricity generation: A non-radial directional distance function approach," European Journal of Operational Research, Elsevier, vol. 221(3), pages 625-635.
    27. Zefeng Mi & Zhixin Qiu & Gang Zeng & Can Zhou & Lei Ye, 2023. "The innovation effect of low‐carbon technology transfer from the perspective of carbon emission reduction demand: A case study of the Yangtze River Economic Belt in China," Growth and Change, Wiley Blackwell, vol. 54(2), pages 625-648, June.
    28. Yu, Yongze & Li, Ke & Duan, Shenglan & Song, Chenchen, 2023. "Economic growth and environmental pollution in China: New evidence from government work reports," Energy Economics, Elsevier, vol. 124(C).
    29. Zhou, Anhua & Xin, Ling & Li, Jun, 2022. "Assessing the impact of the carbon market on the improvement of China's energy and carbon emission performance," Energy, Elsevier, vol. 258(C).
    30. Du, Minzhe & Wu, Fenger & Ye, Danfeng & Zhao, Yating & Liao, Liping, 2023. "Exploring the effects of energy quota trading policy on carbon emission efficiency: Quasi-experimental evidence from China," Energy Economics, Elsevier, vol. 124(C).
    31. Yang, Gangqiang & Nie, Yiming & Li, Honggui & Wang, Haisen, 2023. "Digital transformation and low-carbon technology innovation in manufacturing firms: The mediating role of dynamic capabilities," International Journal of Production Economics, Elsevier, vol. 263(C).
    32. Bai, Caiquan & Du, Kerui & Yu, Ying & Feng, Chen, 2019. "Understanding the trend of total factor carbon productivity in the world: Insights from convergence analysis," Energy Economics, Elsevier, vol. 81(C), pages 698-708.
    33. Fredriksson, Per G. & Millimet, Daniel L., 2002. "Is there a 'California effect' in US environmental policymaking?," Regional Science and Urban Economics, Elsevier, vol. 32(6), pages 737-764, November.
    34. Michael E. Porter & Claas van der Linde, 1995. "Toward a New Conception of the Environment-Competitiveness Relationship," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 97-118, Fall.
    35. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
    36. Jung, Juan & López-Bazo, Enrique, 2020. "On the regional impact of broadband on productivity: The case of Brazil," Telecommunications Policy, Elsevier, vol. 44(1).
    37. Gamtessa, Samuel & Olani, Adugna Berhanu, 2018. "Energy price, energy efficiency, and capital productivity: Empirical investigations and policy implications," Energy Economics, Elsevier, vol. 72(C), pages 650-666.
    38. Du, Yanan & Zhou, Jianping & Bai, Jiancheng & Cao, Yujia, 2023. "Breaking the resource curse: The perspective of improving carbon emission efficiency based on digital infrastructure construction," Resources Policy, Elsevier, vol. 85(PB).
    39. Hanghang Dong & Miaomiao Tao & Jianda Wang & Giovanni Baiocchi, 2024. "How broadband infrastructure development impacts green innovation? A corporate financialization mediated perspective," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(6), pages 6881-6902, December.
    40. Jingxia Chai & Yu Hao & Haitao Wu & Yuemiao Yang, 2021. "Do constraints created by economic growth targets benefit sustainable development? Evidence from China," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 4188-4205, December.
    41. Zhou, P. & Ang, B.W. & Han, J.Y., 2010. "Total factor carbon emission performance: A Malmquist index analysis," Energy Economics, Elsevier, vol. 32(1), pages 194-201, January.
    42. Thorsten Beck & Ross Levine & Alexey Levkov, 2010. "Big Bad Banks? The Winners and Losers from Bank Deregulation in the United States," Journal of Finance, American Finance Association, vol. 65(5), pages 1637-1667, October.
    43. You, Jianmin & Zhang, Wei, 2022. "How heterogeneous technological progress promotes industrial structure upgrading and industrial carbon efficiency? Evidence from China's industries," Energy, Elsevier, vol. 247(C).
    44. Zhang, Zhengyong & Xu, Zefeng & Ding, Yi, 2023. "Do economic growth target constraints affect firm innovation?," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 373-388.
    45. Fan, Hongmin & Liang, Chen, 2023. "The pollutant and carbon emissions reduction synergistic effect of green fiscal policy: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PB).
    46. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tao, Weiliang & Sachin, Kumar Mangla & Weng, Shimei & Deng, Xiangzheng & Chen, Xue-Li & Song, Malin, 2025. "Exploring the impact of energy saving and emission reduction fiscal policy on renewable energy development: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 463-483.
    2. Siyiti, Muhetaer & Yao, Xin, 2024. "Natural resource assets management and urban carbon emission efficiency: Evidence from quasi-natural experiment in China," Energy Economics, Elsevier, vol. 140(C).
    3. Feng, Nan & Ge, Jiamin, 2024. "How does fiscal policy affect the green low-carbon transition from the perspective of the evolutionary game?," Energy Economics, Elsevier, vol. 134(C).
    4. Zhou, Tao & Huang, Xuhui & Zhang, Ning, 2023. "The effect of innovation pilot on carbon total factor productivity: Quasi-experimental evidence from China," Energy Economics, Elsevier, vol. 125(C).
    5. Zhou, Bihua & Huang, Yun & Zhao, Yihang, 2024. "Research on the incentive effect of the policy combination of carbon-reduction pilot cities," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 456-475.
    6. Hu, Wen-Quan & Su, Yunqing & Fang, Hongsheng, 2025. "Constraints and incentives: Promoting air pollution governance through performance evaluation system," Journal of Asian Economics, Elsevier, vol. 98(C).
    7. Xie, Tingting & Yuan, Ye, 2023. "Go with the wind: Spatial impacts of environmental regulations on economic activities in China," Journal of Development Economics, Elsevier, vol. 164(C).
    8. Qi, Yu & Yin, Aoxue & Chen, Jianwei & Yang, Chunfei & Zhan, Pengyu, 2024. "Motivating for environmental protection: Evidence from county officials in China," World Development, Elsevier, vol. 184(C).
    9. Zhu, Bingcheng & Huang, Hongyun & Liu, Ying & Zhang, Ning, 2025. "Twin goals, one policy: Cost-effective collaborative abatement via new energy cities," Energy Economics, Elsevier, vol. 151(C).
    10. Shi, Guifeng & Xi, Yiyang, 2026. "The unintended consequences of the area-based evaluation mechanism reform on green innovation: Evidence from highly polluting firms in China," Energy Economics, Elsevier, vol. 154(C).
    11. Yu, Lianchao & Liu, Donghui & Liu, Qiang & Han, Hongling, 2025. "De-localization of environmental governance and corporate innovation structure: Evidence from a quasi-natural experiment in China," Research in International Business and Finance, Elsevier, vol. 73(PA).
    12. Zhang, Jingxue & Yu, Shiwei & Zhang, Yue-Jun & Su, Bin & Sun, Ya-Fang, 2025. "How do renewable energy policies affect energy green development? Evidence from Chinese listed energy firms," Energy Economics, Elsevier, vol. 142(C).
    13. He, Weimin & Wang, Bin, 2024. "Environmental jurisdiction and energy efficiency: Evidence from China's establishment of environmental courts," Energy Economics, Elsevier, vol. 131(C).
    14. Du, Zhili & Wang, Yao, 2022. "Does energy-saving and emission reduction policy affects carbon reduction performance? A quasi-experimental evidence in China," Applied Energy, Elsevier, vol. 324(C).
    15. Qu, Xinwei & Tian, Mingfu & Zhang, Linbo & Huang, Hongyun & Sun, Di & Song, Malin, 2025. "Energy structural change towards net-zero economy: What can we learn from carbon finance initiatives in China?," Energy Economics, Elsevier, vol. 144(C).
    16. Shenghao Bi & Wanying Zhang & Zhenjun Yan & Andrea Appolloni, 2024. "Impact of energy saving and emission reduction policy: Empirical evidence from regional and local business in China," Business Strategy and the Environment, Wiley Blackwell, vol. 33(8), pages 8815-8832, December.
    17. Zhang, Lu & Chen, Juejin & Wang, Yuan, 2024. "Appointing bankers as governors: Bureaucratic transfers and local government debt dynamics," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    18. Li, Peiyu & Zhou, Hanmei & Liu, Xinzhi & Li, Liping, 2026. "Does public data openness reduce boundary pollution? Evidence from interprovincial neighboring cities in China," Economic Modelling, Elsevier, vol. 155(C).
    19. Cao, June & Huang, Zijie & Kristanto, Ari Budi, 2025. "From bytes to blooms: Tech-driven transformation and green revenues," Energy Economics, Elsevier, vol. 144(C).
    20. Duan, Wenqi & Jiang, Mingming & Qi, Jianhong, 2024. "Poverty or pollution: The environmental cost of E-commerce for poverty reduction in China," Journal of Environmental Economics and Management, Elsevier, vol. 127(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:339:y:2025:i:c:s0360544225046031. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.