Synergistic emission reduction mechanism of command-and-control and market-based incentives: an empirical study based on core firms in supply chains

The effectiveness of carbon emission reductions by core firms in high-carbon industries is a crucial link for achieving China’s “Dual Carbon” goals. Based on provincial panel data from 2011 to 2021 and data from 526 supply chain firms in high-carbon industries, this study employs the Difference-in-Differences method, linear regression, and mediating effect models to systematically examine the mechanisms and effects of command-and-control, market-based incentive, and public participation environmental regulations on the carbon emissions of supply chain firms. The findings indicate that: (1) Both command-and-control and market-based incentive environmental regulations can significantly reduce corporate carbon emissions and carbon intensity; the direct emission reduction effect of public participation regulations is not yet significant. (2) Mechanism tests reveal that green technology innovation plays a key mediating role in the carbon reduction process driven by the two types of formal regulations. (3) Heterogeneity analysis shows that the policy effects are more pronounced in regions with a higher degree of marketization and greater intensity of environmental regulation. This study provides a mechanistic explanation for understanding how firms in high-carbon industries can resolve the dilemma of emission reduction responsibilities through green innovation under regulatory pressure, and offers empirical evidence for differentially combining environmental regulation tools to facilitate low-carbon transformation of supply chains.