The environmental conservation and economic development in the middle and lower reaches of the Yellow River Basin are pivotal components of China’s pursuit of high-quality development. Nevertheless, the majority of scholarly attention has been directed towards the basin’s overall development, overlooking the catalytic impact of coordinated growth in the middle and lower reaches. Therefore, this study establishes an index system for green development under carbon emission limits, focusing on sixty-three cities in the middle and lower reaches. A two-stage nested Theil index is applied to trace multi-level spatial disparities, and a comparative analysis elucidates the dynamic effects of green development drivers in these regions. The findings indicate that: (1) Green development has improved considerably overall, with the downstream region surpassing the midstream region by a considerable margin. (2) There are significant spatial disparities, and within-province differences are the main cause of such disparities. Nonetheless, there’s been a trend in recent years for both the within-region differences and their share of the overall difference to increase. (3) The high quality of economic development serves as a crucial driver for sustainable green development. Benefits to the environment are increasingly clearly playing a driving role. Under carbon constraints, it is essential to consider both environmental benefits and societal well-being. Sustainable development and ecological balance pose distinct regional challenges.