Dual performance of environmental regulation on economic and environmental development: evidence from China

Abstract

Based on the comparative perspective of environmental regulation performance, this paper uses the threshold effect model to analyze the nonlinear characteristics of the impact of environmental regulation on economic development and environmental pollution and explore the dual performance of environmental regulation on economic and environmental development. The results are fourfold: Firstly, the intensity of fiscal expenditure on energy conservation and environmental protection has a restraining effect on environmental pollution, but it has a crowding-out effect on economic growth. Therefore, it is impossible to achieve a win-win situation between ecological protection and economic development by increasing the intensity of financial expenditure on energy conservation and environmental protection. Secondly, giving more financial rights to local governments in eastern China may help to reverse the non-win-win situation of the economy and the environment. Thirdly, increasing the environmental protection awareness of local governments will help to achieve a win-win situation. It is more effective to achieve a win-win situation of ecology and economy using constraint regulation than incentive regulation. Finally, the economic development level of the last period has different threshold effects on the current environmental pollution in the eastern and western China. Thus, the impact of environmental regulation lags. We conclude that we should give full play to the role of the environmental regulation, stimulate the endogenous power of environmental system, accurately implement the key differentiation strategy, and promote the win-win situation of ecological protection and economic development.