Does the national ecological civilization pilot zone achieve a “win-win” circumstance for the environment and the economy: empirical evidence from China

Faced with increasing constraints on resource supply, serious environmental pollution, as well as degraded ecosystems, humans urgently need to propose effective environmental governance initiatives and construct an environmental governance system. Exploiting the national ecological civilization pilot zone (NECPZ) policy as a quasi-natural experiment and using city-level data from 2011 to 2019, this research employs a difference-in-differences (DID) approach to evaluate the comprehensive environmental and economic effects of the NECPZ policy. Meanwhile, we investigate its mechanisms using firm-level data from 2011 to 2019. The NECPZ policy significantly reduces city carbon emission intensity and promotes industrial structure upgrading. The results still hold after a series of robustness tests. The mechanism analysis indicates that NECPZ policy curbs urban carbon emission intensity and boosts industrial structure upgrading via altering four firm behaviours: corporate environmental management, green technological innovation, green finance, and tax relief. Moreover, the impact of NECPZ policy on city carbon emission intensity and industrial structure upgrading varies considerably among regions and different city types. Combining empirical findings and theoretical analysis, this paper argues that NECPZ achieves a ‘win-win’ situation of ecological protection and economic development, which provides evidence for other developing countries to govern the environment and simultaneously develop their economies through constructing ecological civilization systems.