Watershed Ecological Compensation (WEC) is a vital tool for water environmental governance, yet existing research often focuses on either upstream or downstream regions in isolation, lacking a systematic assessment of basin-wide aggregate effects. Taking China’s Xin’an River Basin as a case study, this paper investigates the impacts of cross-provincial WEC on pollutant emissions, economic performance, and green economic efficiency. Theoretical analysis based on a social welfare maximization framework indicates that WEC helps reduce emissions and enhance green economic efficiency, though its impact on economic output is conditional. Using the Synthetic Control Method (SCM) for empirical analysis, the results show that the policy significantly reduced industrial COD emissions by an average of 111 t/10⁸ m³ per year and notably improved green economic efficiency, with industrial COD emissions per unit of GDP decreasing by 3.5 t per 100 million RMB annually. However, no significant impact on overall basin-wide economic development was observed. Robustness tests using Synthetic Difference-in-Differences (SDID) and staggered DID models further confirm the reliability of these findings. This study provides theoretical and empirical support for the policy effectiveness of WEC in pollution control and green development.

China’s Against the backdrop of the global low-carbon transition, balancing ecological protection and economic development has become a critical challenge. This study aims to examine whether and how the Low-Carbon City Pilot (LCCP) policy enhances urban industrial transformation momentum. Using panel data from 283 Chinese cities during 2008–2023, we employ a double machine learning (DDML) approach and use industrial robot installation density as a proxy for industrial development momentum. The results show that the LCCP policy significantly promotes industrial transformation and upgrading. Mechanism analysis indicates that the policy strengthens transformation momentum by enhancing government support and increasing public environmental awareness, particularly in cities with lower innovation costs. The effects are more pronounced in resource-based cities, non-old industrial bases, and economically developed cities, while also exacerbating regional disparities as more developed cities benefit more. These findings provide important implications for achieving coordinated development between carbon reduction and industrial transformation.