<p>Low-income countries and regions often suffer from more severe environmental degradation, which is closely linked to their relentless pursuit of economic growth. As a result, sustainable development and green innovation have increasingly become the developmental goals of numerous countries. Using difference-in-differences and double machine learning models, we evaluate the green innovation payoff of the official incentive system reform (OISR) that focuses on removing regional gross domestic product (GDP) assessment in underdeveloped regions. Our analysis leverages county-level panel data from China covering the period of 2008–2020. The findings indicate that, firstly, the OISR significantly boosts green innovation by approximately 2.03 to 3.10 units. In particular, the OISR demonstrates stronger green innovation effects in central and western China, areas with low growth stage, and areas with high pollution. Secondly, Environmental regulation, environmental protection expenditure, industrial upgrading, and green entrepreneurship are the primary mechanisms involved. Thirdly, the OISR can reduce environmental pollution by up to 9.74 units through fostering green innovation. In summary, the OISR effectively promotes green innovation, contributing to a balance between economic development and environmental protection. Our research provides novel perspectives and empirical evidence for other countries to enhance green innovation and environmental quality via official incentive system reform.</p> Graphical abstract <p></p>