Do pilot zones for green finance reform and innovation promote energy savings? Evidence from China

The establishment of pilot zones for green finance reform and innovation (PZGFRI) is an important green financial policy in China and a crucial means to achieve the objective of energy conservation and emissions reduction. This paper uses panel data of 45 prefecture-level cities in Chinese provinces where pilot zones are located from 2004 to 2019 to study the impacts of the PZGFRI on urban energy savings, by constructing Difference-in-Differences models. The results show that the PZGFRI significantly reduce industrial energy consumption but has no effect on residential energy consumption. The PZGFRI achieve energy savings by promoting green technology innovation, and this effect could be weakened by the fiscal extractive capacity of local government. There is regional heterogeneity in the energy-saving effects of the PZGFRI, and there is also heterogeneity in whether the pilot cities are "Energy Conservation and Emission Reduction Demonstration Cities". There are long-term dynamic and spatial spillover effects of the PZGFRI on urban energy savings. These findings not only have practical significance for strengthening energy savings through the green financial policy in China, but also give some important references for other developing countries.