Editorial: Incentive policies for green innovation, energy efficiency, environmental protection, and sustainability

In the 12th to 14th Five-Year Plan periods of the People's Republic of China, energy conservation and emission reduction have been consistently regarded as central components of the national strategy, aimed at actively promoting the transformation of the industrial economic development model. The Third Plenary Session of the 20th Central Committee of the Communist Party of China underscored the imperative to bolster the ecological civilization framework. It advocated for the collective advancement of carbon and pollution mitigation, the expansion of green initiatives, and economic progression. The session also called for an active engagement with climate change challenges, a hastened enhancement and execution of policies equating environmental sustainability with economic prosperity, optimization of the ecological governance architecture, and the establishment of a green and low-carbon development paradigm.Over an extended duration, China's industrial economic growth model has been excessively dependent on high levels of investment, consumption, and emissions, leading to increasingly severe energy and environmental challenges. With the establishment of the "carbon neutrality objective, the sustainable growth of China's industrial economy and environmental management are facing significant challenges. In the progression of China's green and low-carbon economic development, the roles of manufacturing green innovation, energy efficiency, environmental protection, resource recycling and reuse, green consumption, and green total factor productivity are significant. These elements constitute the essential foundations that drive the growth of the green and low-carbon economy. The core strategies for achieving the harmonious development of economic growth with energy and environmental sustainability are seen in the low-carbon transformation of China's industrial manufacturing, the innovation progression of green and low-carbon technologies, the optimization of environmental efficiency, and the enhancement of green total factor productivity (Xiu et al., 2023a;2023b;Tian et al., 2023).Currently, Chinese manufacturing enterprises are facing numerous challenges in the advancement of environmental technological innovation and the generation of green patents. Specifically, the endeavors of micro-economic entities in green research and development (R&D) and the procurement of green patents are significantly inadequate, which directly contributes to the sluggish growth of the manufacturing sector's green total factor productivity (GTFP). Additionally, the relatively underdeveloped state of green technological advancement and the scarcity of green patents are issues that require immediate attention. Therefore, the exploration of effective incentive mechanisms for green technological innovation within manufacturing enterprises, the enhancement of energy and resource efficiency to promote green technological progress, and the further acceleration of the promotion of green and low-carbon development within the manufacturing sector are the central issues for advancing the green and low-carbon transformation and achieving high-quality development of China's manufacturing industry (Zhao et al., 2021). This special issue delves into the exploration of the mechanisms, pathways, and optimization strategies of incentive policies for green innovation within the manufacturing sector, environmental pollution control, climate protection investments, energy efficiency, and sustainability performance. The goal is to foster a comprehensive enhancement of the green and low-carbon transformation. Porter suggested that in the initial stage, strict and flexible environmental policies may increase the cost for enterprises to carry out environmental innovations. The Porter effect highlights the dynamic nature of enterprise innovation and takes into account both short and long-term impacts. The Porter effect can be divided into the strong and the weak form.The weak porter hypothesis stated that the cost of environmental innovation can be partially offset by penalties for violations and compliance costs. Porter emphasizes that although environmental regulations increase the direct costs of enterprises, it also stimulate enterprises to engage in green innovation, thereby offsetting the costs invested in environmental governance. The strong-porter hypothesis emphasizes the significance of compliance costs and compensation. This innovative compensation will enhance production efficiency and increase the competitiveness of enterprises (Jaffe and Palmer,1997;Lanoie et al., 2011).Numerous domestic and international scholars have conducted extensive empirical research on "the examination of the strong and weak effects of environmental regulations and Porter's hypothesis." Some researchers endorse the strong-weak effect of Porter's hypothesis and substantiate their perspectives through empirical research or quasi-natural experimental policy evaluations. However, some researcher have proposed about the "strong-weak Porter effect" theory. This study has indicated that upon scrutinizing the nonlinear relationship between environmental regulations and the total factor productivity of industrial enterprises, there exists a divergence in the quantitative methodologies employed for environmental regulations. For example: the research findings of Ren et al. (2019) posited that the implementation of an emission trading system policy notably augments the total factor productivity of firms, primarily through the encouragement of technological innovation and the optimization of resource allocation. Zhang et al. (2020) determined that the carbon emission trading policy within heavily polluting industries, the effects are not observed.In our Special Issue, Li and Borojo (2025) posited that technological innovation and digital infrastructure exhibit a nonlinear dynamic relationship with the material footprint within resource-abundant nations. Utilizing the pooled mean group-auto-regressive distributed lag model and moments quartile regression, this research analyzed data from 1990 to 2021. Additionally, this research explored the impact of environmentally-related technological innovation on the material footprint. The empirical study revealed that both technological innovation and digital infrastructure exert a nonlinear dynamic effect on the material footprint, indicating a long-term inverted U-shaped correlation among technological innovation, digital infrastructure, and material footprint. Consequently, technological innovation and digital infrastructure contribute to a resource curse up to threshold values of 2.8 and 2.1, respectively, beyond which they improve resource efficiency in nations with high levels of income.The "Green Paradox" was first proposed by Hans-Werner Sinn. This theory posits that upon a nation's declaration of policies aimed at conserving energy and reducing emissions, conventional suppliers of fossil fuels will promptly alter their strategies to adapt to the environmental regulations. Such strategic adaptations are likely to expedite the development and exploitation of fossil fuels, consequently accelerating the temporal trajectory of carbon emissions. Zhang (2014) employed a spatial dynamic panel data model, integrating the STIRPAT framework and the Logarithmic Mean Divisia Index (LMDI) approach, to account for the energy consumption structure, industrial structure, technological level, per capita income, and population size of each region. This research conducted an examination of the regional carbon emissions Kuznets curve and revealed the spatial spillover effect of environmental regulation policy competition. The results indicated that environmental regulation measures in a region and its neighboring areas had effectively curbed the growth of carbon emissions. However, the spatial strategic interaction of environmental regulation exhibited a competitive upward trend. Influenced by the competition among local governments, the environmental regulation in this region and its neighboring areas not only failed to suppress carbon emissions but also significantly contributed to their increase. This outcome led to the ineffectiveness of environmental regulation. By combining the principal-agent theory with the central-local decentralization phenomenon, local governments pursued GDP growth by increasing energy consumption, creating the so-called "promotion tournament competition bottom effect," which subsequently triggered the "green paradox" phenomenon. Ge et al. (2024) conducted an in-depth assessment of the impact of China's carbon emission trading policy using the difference-in-differences method. By comparing the data of pilot areas with those of non-pilot areas, the research results revealed the phenomenon of the "green paradox" in the construction process of China's carbon emission trading policy.Government's energy conservation and environmental protection expenditure policy (GEPE) functions as an instrument of governmental fiscal policy. It denotes the financial resources allocated by the government to tackle environmental and ecological challenges. This approach to environmental regulation, which is market-oriented, entails the government's utilization of fiscal expenditure and administrative capabilities to oversee economic activities pertaining to resources and the environment. The central aim is to diminish environmental pollution, curtail energy usage, and foster innovation in green low carbon technology. Furthermore, this policy seeks to stimulate societal and corporate engagement in environmental preservation endeavors, thereby augmenting the efficacy of market resource distribution (Zhang and Dong, 2023).Empirical studies have examined the impact of government expenditures on energy conservation and environmental protection on environmental pollution control, and have generally concluded that these expenditures positively contribute to environmental governance. However, some scholars have raised concerns. Li (2024) suggested that GEPE can markedly enhance green innovation and GTFP, albeit with notable geographical and spatial variations. Research findings indicate that in China's central region, the impact of government expenditures on energy conservation and environmental protection on green total factor productivity is not significant. There remains a considerable disparity in the investigation of the relationship between government expenditures on energy conservation and environmental protection and green innovation or green technological progress, both domestically and internationally, particularly with respect to the potential U-shaped effect and spillover effect.In the Special Issue, Lin and Gao (2024) address the challenges faced by 69 resource-depleted cities in China, including resource scarcity, a coal industrial structure, and ecological deterioration. The objective of these resource-exhausted cities is to foster sustainable development by implementing measures such as fiscal transfer payments and industrial substitution. This research has conducted the Difference-in-Differences (DID) method, utilizing Chinese industrial enterprise data to investigate the influence of support policies for resource-depleted cities on the carbon intensity of industrial enterprises. The control variables encompassed enterprise total factor productivity, external openness, industry concentration, asset return rate, and enterprise size, among other factors.Through the application of a fixed-effects model and policy practice adjustments, and after accounting for interferences such as forestry policies, robust research outcomes were procured. These outcomes demonstrate that the Resource-Exhausted City Policy (RECP) notably diminishes the carbon emission intensity of enterprises (β= -0.004). The policy exhibits a more pronounced emission reduction impact on larger enterprises (β= -0.008), and its effect is most pronounced on enterprises with high carbon emission intensity (90th percentile). Mechanistic analysis reveals that the exit of enterprises from high-pollution industries positively moderates the emission reduction effect of RECP. Concurrently, the expansion of the tourism sector reduces the carbon emission intensity of enterprises: for each unit increase in the proportion of tourism revenue, the carbon emission intensity decreases by 0.004 (p< 0.01). Policy recommendations include the reinforcement of environmental assessment and dynamic monitoring, the establishment of an "Industrial Transformation Fund" to support the research and development of low-carbon technologies, and the creation of a market-based exit mechanism for high-pollution enterprises to facilitate the allocation of resources towards low-carbon, renewable energy, and new energy industries.The notion of green credit emerges from the principles of green finance, also known as sustainable development finance, and serves as a fundamental element of the green financial framework. The genesis and evolution of green finance are intricately linked to the inception of the Equator Principles (EPs). As China's ecological conservation efforts become increasingly intertwined with its economic progression, endeavors in energy conservation, emission reduction, the advancement of a green low-carbon economy, and the enhancement of manufacturing quality have emerged as significant catalysts propelling China's economic expansion. The "13th Five-Year Plan," specifically in its segment titled "Accelerating the Improvement of the Ecological Environment," explicitly outlines the establishment of a green financial system and the encouragement of green credit development as pivotal priorities for the "13th Five-Year Plan" era.Credit funds, serving as a crucial impetus for economic progression, fulfill a supportive and directive role in the advancement of the real economy. Nevertheless, confronted with the constraints of a singular administrative strategy in tackling ecological challenges, such as environmental degradation and global warming precipitated by economic expansion, China has proactively promoted the implementation of green credit by financial entities. This initiative involves extending preferential loan facilities to manufacturing enterprises or projects that adhere to environmental protection criteria. Green credit and green finance support mechanisms are instrumental in fostering the sustainable development of a green and low-carbon economy and in encouraging enterprises to embrace heightened social and environmental stewardship roles.Nevertheless, the advancement of green credit in our nation encounters numerous obstacles, encompassing inadequate enforcement of green credit policies, an incomplete ancillary policy framework, and a deficiency in the environmental risk assessment expertise among credit institutions. Liu et al. (2015) undertook a study employing the CGE model. The findings indicated that in the short to medium term, green credit policies can significantly diminish the investment and output levels of industries targeted, yet these policies may also exert detrimental impacts on affiliated upstream and downstream industries. Over the long term, the suppressive influence of green credit policies is anticipated to gradually diminish.The differences impact of green credit on different type of enterprises. He et al. (2019) have found that the improvement of green credit levels has a significant promoting effect on the technological innovation of energy conservation and environmental protection enterprises, and there is a certain lag effect. The research results show that for energy conservation and environmental protection enterprises with a higher degree of financing constraints, the promoting effect of the improvement of green credit levels on their technological innovation is more significant. Ding (2019) research pointed out that under the influence of the green credit policy, the total factor productivity of non-state-owned heavy-polluting enterprises significantly decreased, while that of state-owned heavy-polluting enterprises did not undergo significant changes. Wang (2020) research indicated that green credit did not promote the technological progress of green and low-carbon technologies in various regions. The regression coefficient of the spatial interaction term W of green credit is significantly negative, indicating that it has an inhibitory effect on the surrounding regions.The green credit policy has a positive impact on industrial structure adjustment, environmental pollution control, financial institution development, and economic growth. Xie and Liu (2019) verified through empirical analysis the significant promoting effect of green credit on green technological progress and the driving effect on industrial structure upgrading, revealing the lag effect of green technological progress and the dynamic change characteristics of green total factor productivity. Li et al. (2020) research results show that green credit can effectively promote the industrial structure, it has a positive promoting effect on upgrading of the secondary industry, but it has a reverse inhibitory effect on the development of the tertiary industry, also this research has pointed out that this effect has regional heterogeneity. Dai and Luo (2022) based on the analysis of the green total factor productivity of 284 prefecture-level industrial enterprises, confirmed the synergy between the number of violations by enterprises as an proxy variable for administrative environmental regulation and the research and development expenditure of industrial enterprises as a proxy variable for government technological support, which has a promoting effect on green total factor productivity, and this effect has long-term stability. Their research further explains the synergy effect of market-based environmental regulation and administrative-based environmental regulation in promoting green total factor productivity.In the Special Issue, Sun et al. (2024) have undertaken a study on the independent and interactive effects of the components within environmental, social, and governance (ESG) performance on corporate risk-taking. This research has augmented the theoretical framework of ESG and corporate risk management, particularly through the lenses of environmental technology innovation and institutional ownership. The empirical findings indicate that for each unit increase in the ESG defense line, corporate risk-taking (CRT) experiences an increment of 0.0009, thereby corroborating the notion that ESG, in its corporate risk-taking. 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The of on the effects of carbon emission trading on corporate green technological However, there exists a divergence of perspectives within the of the efficacy of carbon emission there is a on the promoting effect. and Li (2020) suggested that the emission trading system has the potential to green innovation, thereby the green total factor productivity of industrial enterprises. Liu et al. (2019) that the carbon trading policy a positive significantly regional carbon emissions. and (2019) proposed that the carbon emission trading policy can enhance the of enterprises in the short term and significantly the carbon emission intensity of the et al. spatial to the spatial spillover effect of China's carbon emission trading policy on green technological innovation in neighboring regions. However, et al. (2022) indicated that the carbon emission trading not have a significant spatial spillover effect on the total factor productivity of neighboring enterprises, but it can enhance total factor productivity through technological innovation and resource allocation of the inhibitory or Li and (2019) the dynamic nature of green total factor productivity, and the of enterprises from industrial output total and number of The study pointed out that the enhancement of to a certain degree of in of environmental regulation industrial as a proxy variable for market-based environmental regulation environmental regulation may suppress green total factor productivity, but in the long term, environmental regulation will have a positive promoting effect on green total factor productivity. Zhang et al. (2020) found in their analysis that the carbon emission trading policy in the industry a positive while the carbon emission trading policy in heavily polluting industries not show the effect. 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