Ecoefficiency, environmental regulation opportunity costs, and interregional industrial transfers: Evidence from the Yangtze River Economic Belt in China

Abstract

The construction of the Yangtze River Economic Belt is a major strategic measure for coordinating China's regional development. In promoting regional integration, the belt has shown a trend in industrial gradient transfers, especially polluting industries. Measuring the impact of environmental regulations on the economic output and marginal changes in the output caused by pollution reduction is particularly practical and important. This paper analyzes the ecoefficiency, environmental regulation opportunity costs, and interregional industrial transfer strategies for the provinces in the belt under a scenario paradigm. The nonparametric method is used to construct an ecoefficiency measure model. The ecoefficiency changes and differences under various regulations are measured from the temporal (historical) and spatial (provincial) perspectives, respectively. The ecoefficient provinces in the eastern region can be considered benchmarks for the central and western regions to achieve ecoefficiency. A comparative analysis is conducted to assess the opportunity costs of regulations on different pollutants. The results show that a certain degree of difference in regulations must be maintained across the belt to coordinate economic and environmental development. Based on the potential differences in regulations, an appropriate gradient transfer direction for polluting industries is proposed for the provinces, and related policy recommendations are provided.