Spillovers of environmental regulation on carbon emissions network

Abstract

Spatial association of carbon emissions between countries has more to do with trade activities. This paper applies the social network analysis to give a clear picture on the evolutionary characteristics of carbon emissions network of Organization for Economic Co-operation and Development (OECD) countries and investigates the technology spillovers of environmental regulation on the carbon emissions network. Empirical results show that: First, the carbon emissions network of OECD countries presents a typical network structure with increasing network density, correlation and decreasing network efficiency. Second, carbon is mainly transferred among European countries along with the international trade, and the impact of countries on the edge of the network is still small. Finally, the U-shape relationship between environmental regulation and carbon emissions network is identified. The innovation inhibition effect exists when the environmental regulation is in a low level, and after arriving at the threshold value, the innovation compensation effect begins to appear. Our findings implied that when making policies for carbon emissions reduction, countries should strengthen the cross-regional communication and fully consider the spatial correlation effect. Some international organizations are supposed to play a leading role in reducing global carbon emissions by controlling the carbon transfer.