A pathway to net-zero urban emissions: Does green fiscal policy stimulate renewable energy consumption in China?

Accurately assessing the impact of green fiscal policy on urban renewable energy development holds substantial practical importance for achieving energy transition and net-zero emissions goals. This paper uses fiscal policy for energy conservation and emission reduction as a quasi-natural experiment. It analyzes the impact of the green fiscal system on regional renewable energy consumption using sample data from 284 Chinese cities spanning 2005 to 2021, employing the multi-period difference-in-differences method. The study finds that green fiscal policy has significantly improved renewable energy consumption, leading to an increase of 0.1666 units observed in the pilot city. Notably, the impact is more prominent in the first batch of demonstration cities, central cities with high administrative levels, non-resource-based, and low climate risk cities. Additionally, improvements in fiscal self-sufficiency, government intervention, and marketization strengthen its positive impact, whereas market segmentation weakens it. Further analysis reveals that the comprehensive demonstration policy promotes renewable energy consumption both in the city and geographically adjacent areas, exhibiting spatial spillover effects. The conclusions offer policy implications for constructing green fiscal coordination mechanisms compatible with local finance and developing renewable energy.