Cleaner production audit

As a key policy instrument for promoting the green transformation of enterprises, the actual effect of the Cleaner Production Audit program—whether it serves as a catalyst or a constraint—requires further investigation. This study utilizes a dataset constructed by precisely matching five cohorts of “Key Enterprises that Implemented Mandatory Cleaner Production Audits and Passed Assessment”, released by the Ministry of Ecology and Environment, with China’s Key Pollution Source Survey Database. Employing a staggered difference-in-differences methodology, this study investigates the micro-level impacts of the Mandatory Cleaner Production Audit (MCPA) on pollution abatement, carbon reduction, and efficiency gains, as well as its underlying mechanisms. The findings indicate that MCPA significantly enhances both the environmental and economic performance of firms. On average, the policy leads to a 1.6% reduction in sulfur dioxide emission (SO₂) intensity, a 4.9% decrease in carbon dioxide (CO₂) emission intensity, and an 8.8% increase in Total Factor Productivity (TFP). The heterogeneity analysis reveals that MCPA achieves a significant synergistic effect—simultaneously reducing pollution, cutting carbon emissions, and increasing efficiency—for firms located in non-resource-based cities and operating in non-heavily polluting industries. However, this synergistic effect is not observed for firms in resource-dependent cities or heavily polluting sectors. An examination of the mechanisms indicates that MCPAs drive emission reductions and efficiency gains through two primary pathways: technological renovation and technological innovation. Technological renovation is the dominant pathway in the short term, offering more direct and significant contributions. Conversely, while the short-term impact of technological innovation is limited, its synergistic “pollution-carbon reduction” effects and the “innovation compensation” economic benefits it generates are crucial for achieving long-term green and low-carbon transformation. Therefore, the government should implement differentiated MCPA strategies. By employing incentive mechanisms such as fiscal subsidies and cleaner production demonstration projects, policymakers can guide firms to focus on technological retrofitting and green innovation at the front-end and throughout the production process, thereby effectively advancing the corporate green and low-carbon transition.