Green Fiscal-Financial Policy Synergy and EKC Dynamics: Evidence from 252 Chinese Cities

The Environmental Kuznets Curve (EKC) serves as a foundational framework for analyzing the dynamic interplay between economic development and environmental protection. While existing literature has extensively explored the interaction between economic growth and environmental quality within the EKC framework, as well as the individual impacts of green fiscal and green financial policies, there remains a notable gap in understanding the transmission mechanisms and synergistic effects between these two policy domains. This study extends the EKC framework dynamically and conducts a multidimensional analysis to investigate the synergistic impact of green fiscal and green financial policies on the coordination between economic development and environmental protection. Our findings reveal three key insights: (1) The shape of the EKC varies significantly across different pollution indicators, and even for the same indicator, the EKC exhibits dynamic migration characteristics over time. (2) The positive influence of green financial policies on the coordination between economic development and environmental protection is subject to threshold constraints, whereas green fiscal policies demonstrate a more consistent and sustained incentive effect. At the current stage, green fiscal policies outperform green financial policies in terms of effectiveness. (3) Significant synergies exist between green fiscal and green financial policies, suggesting that tailored policy portfolios based on specific pollution indicators are more effective than isolated policy enhancements. Consequently, policymakers should adopt a dynamic and diversified perspective to systematically address the coordination between economic and environmental development. Rather than merely intensifying green fiscal or green financial policies, emphasis should be placed on leveraging their synergistic effects and heterogeneous impacts to design targeted policy portfolios.