Sustainable development goals and firm carbon emissions: Evidence from a quasi-natural experiment in China

Using a difference-in-differences approach, this paper investigates the impact of changes in China's sustainable economic development goals on the energy conservation and emissions reductions behavior of Chinese firms. On average, incorporating emissions reduction targets into the long-term development plans produced significant effects in terms of energy conservation and emissions reduction, reducing energy consumption intensity between 2008 and 2011 by 1.39% and carbon emission intensity by 2.37%. The effects were mainly achieved through two long-term mechanisms, namely, optimizing energy consumption structure and increasing investment in green technologies. Both reflect firms' preference to take long-term measures rather than temporary ones. We also found that non-state-owned firms, firms without government financial subsidies, and firms with high external financing dependence, put more effort into reducing their carbon emissions in order to comply with the adjusted goals.