The impact of environmental regulation on the optimization of industrial structure in energy-based cities

Abstract

This paper aims to investigate how to help energy-based cities shed their resource dependence and change their backward-looking industrial structure by focusing on cities in China's energy basin urban agglomerations as the research object. To do this, we construct a two-way fixed-effects model, using panel data from these cities from 2010 to 2020, to empirically analyze the impacts of three types of environmental regulations, namely, command-and-control, market incentive, and public participation, on the optimization of energy cities' industrial structure and role mechanism.The results show that the three types of environmental regulation policies have different effects on industrial structure optimization. The command-and-control environmental regulation shows a "U"-shaped dynamic evolution of industrial structure optimization, the market-incentivized environmental regulation inhibits such optimization, and the public-participation environmental regulation plays a role in promoting it. The mechanism test confirms that environmental regulation indirectly affects the optimization of industrial structure through technological innovation, and that the effects of different environmental regulations are varied. Heterogeneity analysis reveals differences in the effects of environmental regulation policies in different basins and for different periods.