Financial support is essential to reduce carbon emissions (CEs) and achieve the green transformation of China. To detect the nexus of local finance and CEs, we constructed a two-sector (clean and dirty sectors) model to identify the channels from city commercial banks (CCBs) to CEs involving capital scale, structure, and efficiency. Using the setting of CCBs as a quasi-natural experiment, we applied difference-in-differences (DID), instrument variable (IV), and spatial DID methods to test the effects of the construction of CCBs on CEs in China during 2003 to 2018. The construction of CCBs promoted CEs in cities by offsetting the technological effect and stimulating electricity consumption expansion (scale effect) and reindustrialization (structural effect). CCBs’ branches strengthened the promotion effect of CCBs’ construction on CEs, but the mergers of CCBs mitigated the effect. The effects varied across regions with different features (covering location, per capita income, financial development, environmental regulation, industrial and energy structure, carbon source, and so on). The construction of CCBs showed a spatial spillover effect, increasing the CEs of neighbors. Accordingly, suggestions were proposed to reduce CEs by optimizing CCBs management, policy making, and local carbon reduction efforts.JEL Classification: E44, G28, O16

A well-developed intellectual property system is an important backbone for green innovation and technology, which are widely regarded as crucial tools to combat haze pollution and achieve blue sky. Despite China’s aggressive launch of the Intellectual Property City Program (IPCP) since 2012 to improve its intellectual property system, there is little evidence on whether and how IPCP affects haze pollution. Compiling a panel dataset of Chinese cities, we employ a difference-in-differences estimator to identify the causal impact of IPCP on haze pollution. We find that IPCP can effectively reduce haze pollution in IPCP cities compared to non-IPCP cities after the IPCP launch. Our instrumented results using ancient academies further support the haze-abatement effect of IPCP. Mechanism tests reveal that this reduction is driven by green innovation effect and resource allocation effect. The effect is pronounced in eastern cities and cities with high degrees of green innovation, marketization and environmental regulation intensity. Our findings provide support for the critical role of powerful IP protection in haze pollution control.