<p>Industrial emissions represent a significant environmental challenge in the developing world, primarily serving as a major source of pollution. The place-based economic development policies implemented by the Chinese central government have succeeded in narrowing the disparities in regional economic development. However, this study investigates the unintended environmental costs associated with these economic development policies, specifically highlighting that developed regions are subject to stricter land regulations compared to undeveloped areas. Utilizing a generalized difference-in-difference approach, we provide a robust estimation of the unintended effects on industrial emissions. Our findings indicate that regions with stricter land regulations experience a reduction of more than 8% in industrial emissions compared to their less-regulated counterparts because of the place-based policy. After ruling out alternative explanations, we conclude that this decline in industrial emissions is primarily attributable to the relocation of enterprises rather than technological advancements, the adoption of clean energy, or decreased production—particularly within highly polluting industries. Additionally, we observe a negative spillover effect in less-regulated regions, which is influenced by geographic proximity. Furthermore, by applying machine learning techniques, we reveal that national emissions with incomplete regulation increase by over 10% compared to emissions levels that would prevail in the absence of such regulation. Our results underscore the unintended environmental costs of place-based economic development policies and provide valuable insights for governments seeking to balance environmental protection with sustainable economic growth.</p> Graphical abstract <p>Schematic illustration of the study mechanism and findings</p>