Synergy between pollution control and carbon reduction: China's evidence

Abstract

The proposal of dual carbon goals indicates that China's overall ecological environment protection will focus on carbon reduction in the future. Our concern is whether the existing environmental regulatory policies focusing on pollutants emission have a synergistic effect on carbon reduction. Based on China's 11th Five-Year Plan, this paper examines the synergy between pollution control and carbon reduction by using the data at China's “province-industry-year” level and constructing a difference-in-difference-in-differences analysis framework. The results show that the implementation of the 11th Five-Year Plan has significantly reduced the CO2 emissions of polluting industries in provinces with stricter environmental regulations, which means that it has played an important role in promoting carbon neutrality. Moreover, the mechanism analysis suggests that the 11th Five-Year Plan can achieve CO2 reduction through energy substitution and technological innovation, but the effect of the energy structure transformation is not significant. The results also indicate that climate benefit was realized at the cost of declining output and employment. The findings of this paper contribute to an in-depth understanding of the synergistic system of reducing pollution and carbon emissions and provide empirical evidence for formulating development strategies and policies to achieve synergies, which has important practical guiding significance.