Identifying and assessing the multiple effects of informal environmental regulation on carbon emissions in China

Abstract

Against the backdrop of the global carbon peak and carbon neutrality goals, the role of informal environmental regulation, epitomized by public engagement, is assuming an increasingly pivotal position within the realm of environmental management. By contrast, amidst the prevailing landscape dominated by formal environmental regulation (command-and-control and market-driven approaches), the environmental effects of informal environmental regulation on carbon emissions have received scant attention. Consequently, we examine the net, nonlinear, and mediation effects of informal environmental regulation on carbon emissions using panel data from 30 provinces in China, from 2003 to 2019. We find that informal environmental regulation has a significant effect on regional carbon emission reduction, especially in the eastern cities, pilot cities, and cities with long-term governor's tenure. Its U-shaped effect is confirmed by changes in environmental decentralization. The key points remain valid after the robustness test and the endogenous processing. The mechanism analysis shows that informal environmental regulation can reduce carbon emissions in the dual channels by improving industrial structure transition and renewable energy substitution. Therefore, this study assesses the management effectiveness of informal environmental regulation and determines the underlying mechanism between it and regional carbon emission reduction to provide a reference and an empirical basis for other countries regarding environmental improvement.