Abstract
It is a critical question for environmental governance to examine whether the administrative award and punishment measures are effective in promoting environmental governance performance. Choosing the implementation of a mandatory target system (MTS) as the subject, this paper employs a fixed-effect panel data model and regression discontinuity design to test whether the MTS has improved the environmental governance performance of local governments in China. The results of this research demonstrate that the MTS has a positive effect on environmental performance, however the regression discontinuity design illustrates that the reward and punishment measures in the MTS have no significant effects on the provincial environmental performance. The results of this research provide a reasonable explanation to the existing gaps among the studies on the effectiveness of the MTS. This study has profound policy implications for the design and implementation of the environmental governance system in China.
Highlights
The mandatory target system (MTS) implemented during the 11th and 12th Five Year Plan (FYP) (2006–2015) is one of the most important mechanisms in the practice of environmental governance in China
We test Hypothesis I: that the MTS has a positive effect on improving environmental performance, by estimating the following equation: EGjt = αDjt + βEGjt−1 + ΓXjt + δj + ξt + εjt where j and t stand for province and year, respectively
We expect a negative value for the coefficient of Djt(α < 0), which indicates that energy consumption per unit of GDP, Chemical Oxygen Demand (COD) and SO2 emissions growth rates decline after the MTS is implemented
Summary
The mandatory target system (MTS) implemented during the 11th and 12th Five Year Plan (FYP) (2006–2015) is one of the most important mechanisms in the practice of environmental governance in China. The MTS adopted the method of multi-layer decomposition, in which the environmental objectives on unit energy consumption and major pollutant emissions are assigned to local governments, and the corresponding reward and punishment measures for the completion of objectives are stipulated in detail. This environment “Target Responsibility System” with Chinese characteristics has received great attention from both scholars and government officials since its implementation [1]. During the 12th FYP (2011–2015), the numbers for the three indicators were 6.28%, 2.50% and 2.62% respectively, all of which have achieved the expected progress. These results presented sharp contrasts to the dramatic increase in the three indicators during the 10th FYP (2001–2005)
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