Dynamic relationship between environmental regulation and energy consumption structure in China under spatiotemporal heterogeneity

Abstract

The optimization of energy consumption structure (ECS) is indispensable in developing green economy and mitigating environmental pollution, but the regional heterogeneity of environmental regulation (ER) and socio-economic drivers leads to more complicated formulation of energy and environment policy. In this paper, the dynamic relationship between ER and ECS and the driving mechanism of ECS in the context of spatiotemporal heterogeneity are analyzed using China's province-level data over 1998–2017. Firstly, the spatial autocorrelation of ECS is tested to observe the spatiotemporal characteristics. Secondly, the dynamic relationship between formal environmental regulation (FER) and ECS is analyzed by system generalized moment method at national and regional level. Finally, the nonlinear relationship between FER and ECS is estimated by applying panel threshold model, and the effects of FER on ECS in different intervals are studied. The results illustrate that the autocorrelation of ECS is gradually weakened, and ECS has obvious regional features. What's more, the lagged ECS hinders the optimization of ECS, that is, ECS has a strong path dependence. The lagged FER promotes ECS. Furthermore, two thresholds exist in the sample period to divide FER into three mechanisms. Weak and medium FER promotes ECS optimization, while strong FER inhibits the optimization. According to empirical results, energy policies are put forward.