Based on panel data from 270 prefecture-level cities in China from 2006 to 2021, this paper employs the Pilot Programme to Promote the Integration of Science and Technology (S&T) Finance as a quasi-natural experiment. A difference-in-differences (DID) model is applied to evaluate its impact on urban carbon reduction, spatial spillovers, and underlying mechanisms. The results show that the pilot programme significantly promotes carbon reduction and facilitates low-carbon urban transformation. These findings remain robust after a series of tests, including parallel trend tests, placebo tests, double machine learning, and PSM-DID, which address endogeneity concerns. The programme also generates positive spatial spillover effects on neighboring cities. Heterogeneity analysis reveals that its impact varies across cities, depending on development scale, environmental awareness, and human capital levels. Mechanism analysis reveals four key drivers of carbon reduction. These include factor agglomeration, technological innovation, structural transformation, and resource allocation.
Zhou et al. (Fri,) studied this question.