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Regulation and decarbonization: how can environmental regulations more effectively facilitate industrial low-carbon transitions?

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Abstract

Environmental policies play an important role in the process of industrial low-carbon transition in developing countries. From the perspective of the impact condition and mechanisms, we discuss how to improve their effectiveness to give full play to the positive impact of environmental regulations. Based on provincial industrial data from 2003 to 2019 in China, this study uses a threshold regression model and endogenous regression to reveal the impact condition and mechanisms of environmental regulations on industrial low-carbon transition. The results suggest that (1) technological innovation capability and cost-bearing capacity are the key conditions for environmental regulations to exert a positive impact on low-carbon transition. (2) Environmental regulations have a positive impact on low-carbon transition through technological innovation (technology), resource reallocation (capital), and skill premium (labor). Research on the implementation conditions and mechanisms of environmental regulations will help policy-makers formulate appropriate and reasonable environmental regulations and eliminate the obstacles between environmental regulations and low-carbon transition, while an assessment of China’s environmental policies will provide a reference for environmental governance in other developing countries.

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Notes

  1. Data source: 2020BP World Energy Statistics Yearbook.

  2. The first external problem is the problem of financial risks. Green innovation activities have the characteristics of long time, high risk, and new projects, and the support in the financial field is insufficient. The second problem is that the return of pollution control is mainly beneficial to society, with the private sector lacking the motivation to research and develop innovation and to bear the cost, resulting in a lack of green innovation. These externalities require the government to enforce environmental policies and to effectively intervene (Ouyang et al. 2020).

  3. Referring to the carbon emission accounting method of CEADs, only the emission of cement production is considered, because according to the research of Guan et al. (2021), the carbon emission of cement production in China accounts for 70%.

  4. Data source: White Paper on China's Energy Development in the New Era.

  5. Li Y.2016. Accelerating technological transformation and improving supply efficiency, Economic Daily, 11th Edition, January 13.

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Funding

The work is supported by the National Soft Science Project of State Forestry and Grassland Administration (Grant No. 2019131039); by the Doctoral Research Fund, Northwest A&F University (Yangling) (Grant No. 109022008); by the 67th batch of projects supported by National Postdoctoral Science Foundation of China (Grant No. 2020M673498); by the Social Science Foundation of Shaanxi (Grant No. 2020D021); and by the key project of ecological space governance in Shaanxi Province (2022HZ1845).

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Authors and Affiliations

  1. School of Economics and Management, Northwest A and F University, Xianyang, 712100, Yangling, China

    Yongwang Zhang & Minjuan Zhao

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  1. Yongwang Zhang
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  2. Minjuan Zhao
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Yongwang Zhang: conceptualization, software, methodology, writing—original draft, data curation, formal analysis, funding acquisition. Minjuan Zhao: formal analysis, funding acquisition, review and editing.

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Correspondence to Minjuan Zhao.

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Zhang, Y., Zhao, M. Regulation and decarbonization: how can environmental regulations more effectively facilitate industrial low-carbon transitions?. Environ Sci Pollut Res 30, 93213–93226 (2023). https://doi.org/10.1007/s11356-023-28302-5

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