Can digital-green dual pilot policy enhance green total factor productivity? Evidence from energy conservation and emission reduction fiscal policy and smart cities.

Amidst global efforts to mitigate environmental degradation and stimulate stagnant growth, digitalization and decarbonization have emerged as pivotal policy drivers. However, focusing solely on individual policy instruments neglects the potential synergies. This study bridges this gap by evaluating the integrated effects of digitalization and greening policies on green total factor productivity (GTFP). Utilizing panel data from Chinese cities, we construct a quasi-natural experiment by combining the national comprehensive demonstration city of energy conservation and emission reduction fiscal policy with smart cities to assess their joint impact on GTFP. Our findings suggest that the digital-green dual pilot policy is associated with an average increase in GTFP of 0.231, corresponding to an improvement of approximately 27.43% relative to the sample mean. Notably, a plausible policy synergy appears as joint implementation of both policies outperforms their simple aggregation. Evidence from mechanism analysis indicates two channels. Structurally, the digital-green dual pilot policy is associated with reductions in energy intensity and the facilitation of industrial upgrading. Technologically, it appears to stimulate innovation willingness and enhance green innovation capabilities. Furthermore, moderation analysis implies that the positive impact tends to be amplified by fiscal decentralization but attenuated by market segmentation. Heterogeneity analysis indicates that the effects are more pronounced in cities with low fiscal pressure, non-old industrial bases, and non-hubs. Finally, the results indicate that the policy's environmental effects vary across different categories of pollutants. These findings provide policy-relevant insights into coordinating digitalization and environmental governance to achieve Sustainable Development Goals (SDGs).