Benefits of establishing new energy consumption cities: Evidence from industrial enterprises sustainability

The transition to renewable energy consumption is a key priority for advancing global sustainable development. This study investigates the impact of the Renewable Energy Consumption Demonstration City (NECDC) policy on industrial enterprise sustainability. Employing a difference-in-differences design, this paper documents that the NECDC policy significantly raises industrial enterprise sustainability, yielding dual benefits in environmental governance and income growth. The effect is primarily driven by substantial green innovation and lowered financing constraints. Moreover, the NECDC policy is particularly effective in cities facing high environmental pressures, with its positive effects most pronounced in large industrial firms, heavily polluting sectors, and enterprises with solid developmental foundations. These findings provide valuable insights for policymakers worldwide seeking to develop policies that optimize energy structures for sustainable development.