Heterogeneous two-sided effects of different types of environmental regulations on carbon productivity in China

Abstract

In the context of globalization, the importance of enhancing carbon productivity is becoming increasingly evident. The study is a continuation of previous studies on the relationship between environmental regulations and carbon productivity. Based on a dataset of 30 provinces in China from 2006 to 2018, the paper decomposes the two-sided effects of command-and-control and market-based environmental regulations on carbon productivity. First, empirical research shows that the average positive effect of command-and-control environmental regulation on carbon productivity is 0.0158, which is much less than the average of negative effect of 0.0697, highlighting mainly the negative effect on carbon productivity. Conversely, the positive effect of market-based environmental regulation on carbon productivity is 0.0691, much greater than the negative effect of 0.0038, which highlights the obvious positive impact characteristics. Overall, the net effect of command-and-control environmental regulation on carbon productivity is −0.0541, and net effect of market-based environmental regulation on carbon productivity is 0.0653. Second, the negative impact of command-and-control environmental regulations on carbon productivity underwent a “back-to-N” change process in 2006–2018, while the driving effect of market-based environmental regulation on carbon productivity increased continuously during the 2006–2018 period. Third, most of the regions with high negative effects of command-and-control environmental regulation on carbon productivity tend to be resource-intensive and carbon-intensive, while the positive effects of market-based environmental regulation on carbon productivity have no obvious geographical agglomeration characteristics. Fourth, the continuous improvement of regional development conditions is clearly conducive to the continuous reduction of the negative effects of command-and-control environmental regulation on carbon productivity, while the higher positive effects of market-based environmental regulation on carbon productivity at this stage need to meet different regional condition intervals.