Robustness test.

This paper aims to effectively reduce CO2 emissions by examining the impact of three distinct incentive and constraint policies on the quality of rating and certification information in China’s green bond issuance market. To accomplish this, the government has implemented incentives, while regulators have introduced constraints to curb the spread of inflated rating and certification information. We build on the integrated rating and certification regulation mechanism by presenting a two-stage Stackelberg game model that involves four key participants: the China Securities Regulatory Commission, local governments, green evaluation and certification agencies, and credit rating agencies. We incorporate environmental effects indicators into the expected utility of rating and certification agencies to investigate the equilibrium conditions under three policy scenarios: a single financial incentive policy, a single regulatory constraint policy, and a combined incentive and constraint policy. The paper employs Stackelberg game theory to analyze how different policies mitigate the occurrence of “inflated” ratings and “greenwashing” in certifications. Numerical analysis is conducted to validate the theoretical findings. Moreover, we assess the impact of these policies on the quality of rating and evaluation information, using data from China’s green bond issuance market between 2016 and 2021. Our research offers valuable management insights and regulatory recommendations for both regulators and local governments.