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To improve the industrial spatial layout and propel regional coordinated development, China has implemented the policy of NIRDZs since 2010. However, there is little literature focuses on the relation between NIRDZs and carbon emissions. Based on the balanced panel data from 284 China's prefecture-level cities during 2003–2019, this article combines the time-varying DID model, mediating model, and spatial DID model to systematically qualify the impact of NIRDZs on urban carbon emissions. The results show that: (1) NIRDZs effectively reduce recipient cities' carbon emissions, which has been confirmed by a variety of robustness checks. (2) NIRDZs' carbon reduction effect is more pronounced in cities in the central region, cities with poverty-stricken counties, large-scale cities, and resource-based cities, but exacerbates environmental demonstration cities' carbon emissions. (3) Industrial structure upgrading, foreign capital attraction, and government financial support are the three important channels through which NIRDZs influence urban carbon emissions. (4) NIRDZs have a significant spatial spillover effect on urban carbon emissions, and can significantly reduce carbon emissions in both neighboring pilot and non-pilot cities. These findings have substantially vital theoretical and practical implications for China to achieve low-carbon transformation in cities in the process of industrial transfer.
•A time-varying DID model is adopted to quantify NIRDZs' impact on urban carbon emissions.•NIRDZs can effectively reduce carbon emissions in recipient cities.•NIRDZs' carbon reduction impact varies across different recipient cities.•Industrial structure optimization, foreign investment attraction, and government financial support are the three important channels through which NIRDZs affect recipient cities' carbon emissions.•NIRDZs have significant spatial spillover effects on carbon emissions in neighboring and non-pilot cities.