Assessing the impact of economic growth target constraints on environmental pollution: Does environmental decentralization matter?

Abstract

In the context of the goal of “carbon neutrality”, an economic development model that achieves emission reduction goals and ensures stable economic growth is currently being advocated by China. Based on provincial panel data in China from 2005 to 2016, we analyse the impact of economic growth target (EGT) constraints on environmental pollution using a spatial econometric method. The results indicate that EGT constraints significantly exacerbate environmental pollution in local regions and adjacent areas. Local governments are motivated to achieve economic growth goals at the expense of the ecological environment. The positive effects are attributed to a reduction in environmental regulation (ER), industrial structure upgrading and technological innovation and an increase in foreign direct investment (FDI). Moreover, environmental decentralization (ED) plays a positive regulatory role and can weaken the adverse influences of EGT constraints on environmental pollution. Interestingly, the nonlinear impact of EGT constraints on environmental pollution relies on different types of ED. Environmental administration decentralization (EDA) and environmental supervision decentralization (EDS) can reduce the positive effect of EGT constraints on environmental pollution, while an improvement in environmental monitoring decentralization (EDM) can increase the promoting influences of the constraints of economic growth goals on environmental pollution. The above conclusions still hold under a series of robustness tests. Based on the above findings, we suggest that local governments set scientific growth targets, establish scientific assessment indicators for officials, and optimize the ED management institution.