Green transformation or economic growth? The dual impact of the environmental target-based responsibility system in resource-dependent cities

The balance between carbon emissions reduction and economic growth in resource-based cities is a critical issue that must be addressed by nations worldwide in their pursuit of carbon neutrality. Leveraging city and firm data from 108 resource-based cities, this study dissects the dual impact of the environmental target-based responsibility system (ETRS) on industrial green transformation and economic growth. The empirical results reveal a pronounced policy paradox: while ETRS significantly facilitates the industrial green transformation in resource-based cities, it concurrently suppresses annual GDP growth. The mechanism analysis indicates that the policy has weakened the dominant industry’s role through production cuts, technological upgrades, and the greening of industrial structures, leading to the dilemma. Critically, complementary policies–including green finance and fiscal policies–are found to mitigate the growth slowdown by fostering emerging green sectors. These findings highlight the unintended economic costs of rigid environmental accountability systems and advocate for policy synergy mechanisms to reconcile environmental goals with developmental needs in resource-based regions.