Based on a quasi-natural experiment with the Zero Waste Cities (ZWC) initiative launched in 2019, this study takes 14,191 Chinese A-share listed companies from 2014 to 2022 as the research object to assess the impact of the policy on pollution and carbon emission reduction through a difference-in-difference method. It highlights the superior effectiveness of ZWC in enhancing collaborative efforts towards emissions reduction, with waste reduction impacts exceeding those on carbon emissions. The success is attributed to three main channels: rigorous environmental governance, green innovation promotion by firms, and shifts in public behavior. Unlike local punitive measures, a distinctive subsidy incentive mechanism significantly bolsters policy effectiveness. Heterogeneity analysis shows a more pronounced impact in regions with active green credits, high waste discharge, firms with irreversible resources, and firms lacking green experience. Further, the study reveals that while the ZWC policy encourages sustainable development with strict ecological standards, it inadvertently leads to a "pollution refuge" effect-decreasing the number of businesses in pilot areas but increasing them in neighboring regions, along with a rise in carbon and waste emissions. Additionally, the study underscores an inverted "U" shaped environmental Kuznets curve in Chinese cities. These findings provide valuable insights for implementing waste-free urban strategies in emerging nations.
Keywords: Carbon reduction; Differential government supervision; Pollution reduction; Zero-waste city; environmental regulation.
Copyright © 2025 Elsevier Ltd. All rights reserved.