Together or alone? Environmental regulations and energy consumption: Empirical evidence from 200 cities in China

With the global energy structure transition accelerating, the optimal design of policies for coordinating energy, economic, and environmental development is crucial for enhancing the institutional mechanisms of green and low-carbon transformation. This paper aims to investigate the effectiveness of heterogeneous environmental regulations in reducing urban energy consumption in China, and to explore whether their joint implementation generates the policy synergy effects. This study employs a multi-period Difference-in-Difference (DID) model to examine two representative policies: the Carbon Emissions Trading System (ETS), as a market-based regulation, and the Low-carbon City (LC) policy, as a command-and-control regulation. The results indicate that both the ETS and LC effectively suppress energy consumption; however, their simultaneous implementation diminishes individual policy impacts. In terms of impact mechanisms, both ETS and LC significantly reduce energy consumption by promoting the upgrading of transportation infrastructure, with the level of Financial Technology (FinTech) serving as a moderating factor. Spatial effect analysis reveals that the implementation of ETS produces significant spatial spillover effects on energy consumption. Our findings enhance the understanding of the relationship between heterogeneous environmental regulations and energy consumption, and provide valuable insights, to a certain extent, for the formulation of future environmental regulation policies applicable across emerging economies.