Innovation-led productivity lifts urban energy utilization efficiency via policy and governance

The global pursuit of sustainable urban development is often undermined by the classic rebound effect where gains in energy utilization efficiency are paradoxically offset by increased consumption. This challenge underscores the limitations of isolated technological fixes and calls for a more systemic framework. Under this background, China's national strategy of "New Quality Productive Forces" (NPRO) presents a novel paradigm, yet its causal impact on urban energy utilization efficiency (TE) remains empirically underexplored. This study addresses this critical gap using a panel of 280 Chinese cities from 2010–2022, employing Double Machine Learning (DML) for robust causal inference and spatial econometric models to quantify spillover effects. The findings are as follows: first, the spatial analysis uncovers a pattern of asynchronous evolution. NPRO generation exhibits strong geographic stickiness in eastern coastal hubs, whereas its TE benefits display a broad diffusion pattern inland, driven by positive spatial spillovers to economically interconnected neighboring regions. Second, causal evidence indicates that NPRO significantly enhances urban energy efficiency; a one-standard-deviation increase in the NPRO index is associated with a 0.644-standard-deviation improvement in TE. Third, positive effect is primarily channeled through two institutional mechanisms: the intensification of low-carbon policies and the enhancement of governance transparency. Finally, this positive impact is heterogeneous, proving most pronounced in cities that prioritize environmental protection, possess advanced industrial structures, are in the eastern region, or have a lower degree of government intervention. Ultimately, this study offers robust causal evidence that a systemic, state-led productivity framework can mitigate traditional efficiency paradoxes, providing crucial implications for designing spatially-aware energy transition policies in emerging economies.