Low-Carbon Governance, Fiscal Decentralization and Sulfur Dioxide Emissions: Evidence from a Quasi-Experiment with Chinese Heavy Pollution Enterprises

Ping Guo,Yifei Zhu,Renrui Xiao,Jin Li,Jinsong Kuang,Donghao Duan,Baocong Huang

doi:10.3390/su14063220

Ping Guo, Yifei Zhu + Show 5 more

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https://doi.org/10.3390/su14063220

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Journal: Sustainability	Publication Date: Mar 9, 2022
Citations: 10	License type: CC BY 4.0

Affiliation: Hunan University, Hunan University of Technology

Abstract

This paper investigates the effects of enterprise environmental governance under low-carbon pilot policies in China with a difference in differences (DID) design. In examining the development of these policies, we focus on exploring their effects on sulfur dioxide emissions of heavily polluting enterprises based on prefectural city- and firm-level data. Overall, the policies significantly increased enterprise sulfur dioxide emission, and the underlying reason being that investments in carbon dioxide emissions control crowded out investment in sulfur dioxide emission control in enterprises in low-carbon pilot regions. We also find that the implementation of low-carbon pilot policies resulted in greater sulfur dioxide emission from state-owned enterprises and enterprises in western regions than from non-state-owned enterprises and those in eastern regions. It is further found that fiscal decentralization and the associated mediating effect of market segmentation promote enterprises’ carbon dioxide emissions control and inhibit their sulfur dioxide emission control. This study helps us re-examine the overall environmental effects of low-carbon policies and has implications for the revision and improvement of environmental governance policies in developing countries.

Highlights

IntroductionChina has become increasingly serious [1,2], with air pollution problems caused by emissions of carbon dioxide (CO2 ) and sulfur dioxide (SO2 ) becoming a particular focus of attention [3,4]
Accepted: 4 March 2022With rapid economic development, air pollution caused by industrial production inChina has become increasingly serious [1,2], with air pollution problems caused by emissions of carbon dioxide (CO2 ) and sulfur dioxide (SO2 ) becoming a particular focus of attention [3,4]
Due to the fact that the Low-Carbon Pilot Policy (LCPC) involves assessment of local governments, LCPC regional governments have incentives to use the fiscal autonomy granted by fiscal decentralization to meet carbon targets, resulting in fiscal support that inhibits control of SO2

Summary

Introduction

China has become increasingly serious [1,2], with air pollution problems caused by emissions of carbon dioxide (CO2 ) and sulfur dioxide (SO2 ) becoming a particular focus of attention [3,4]. Poor air quality can lead to major public health and welfare problems [5]. Ellison et al [6] explored the relationship between air quality in low-emission zones and that of surrounding regions before and after policy implementation and assessed the impact of low-emission policies implemented in London on regional air quality. Wolff [7] assessed the impact of low-emission area policies implemented in Europe on regional air quality by using a difference-in-differences (DID) design to determine the treatment effects across regions and over time. Gehrsitz [8] used DID to investigate the effect of low-emission zone policies implemented in Germany on air quality and infant mortality.

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