Environmental Policy Innovation Research Articles

Climate policy and corporate artificial intelligence: Evidence from low-carbon city pilots in China

The Low-Carbon City Pilot (LCCP) program in China is a climate policy implemented at the city level, and its impact on the development of corporate artificial intelligence (AI) remains to be studied. The LCCP program aims to promote low-carbon transformation in multiple Chinese cities and serves as a quasi-natural experiment to determine whether similar city-level climate policies can foster the development of corporate AI. This study employs a multi-period differences-in-differences (DID) approach to evaluate the impact of China’s LCCP program on the development of corporate AI. By redirecting attention from national-level policies to city-level initiatives, this study provides unique insights into the localized effects of climate policies on technological innovation within firms. The research findings indicate that the LCCP program has a significant promoting effect on the development of corporate AI. These results underscore the potential of city-level climate policies, such as the LCCP program, to drive advancements in corporate AI technologies. By demonstrating a positive correlation between the implementation of the LCCP program and increased levels of AI development within companies, the study provides valuable insights into the intersection of environmental policies and technological innovation. Policymakers and businesses can use these findings to guide the design and implementation of initiatives aimed at promoting sustainable economic growth through enhanced AI adoption. This study not only contributes to the academic discourse on environmental policy and technological innovation but also offers practical recommendations for achieving a balance between environmental sustainability and technological advancement.

Environmental protection policy and green innovation in China

ABSTRACT Based on institutional theory, this letter examines the effects of a nationwide environmental protection policy, i.e. the New Development Philosophy (NDP), on green innovation in China. Our predictions were tested based on a dataset of 2,645 Chinese listed firms from 2009 to 2017. Results obtained from Poisson regressions indicate that firms respond actively to NDP by engaging more extensively in green innovation. This relationship is positively moderated by CEO attributes, i.e. CEO tenure, technical background, political connections, and international education. Our findings suggest that policymakers should exert efforts to enact policies that promote green innovation. Also, the study will help managers to make more informed decisions about investing in green innovation.

Environmental policy vs. Environmental innovation: An examination of policies disclosure on sustainable development from stakeholder theory perspective

AbstractStudying environmental policy (EnP) and environmental innovation (EnI) is a crucial domain for addressing global challenges such as climate change, resource depletion, and pollution. It equips the corporates with the knowledge and tools to develop effective strategies, regulations, and technological advancements that can mitigate environmental impact and promote sustainable practices for the benefit of current and future generations. This study attempts to uncover the influence of both EnP and EnI toward sustainable development (SD) within three dimensions, that is, social aspect, economic aspect, and environmental aspect from Chinese multinational enterprises (MNEs). A total of 723 documents were considered for data analysis using the SEM method and SmartPLS tool. The outcomes of the study are found interesting and fruitful where firstly a positive connection between EnP and SD was affirmed within Chinese MNEs. Second, the study found a positive nexus between EnI and SD, respectively. The findings highlight the insights by demonstrating EnP and EnI can help attain ultimate output and can strengthen SD of the Chinese MNEs. Additionally, this study offers several thought‐provoking and useful managerial recommendations as well as implications for both theoretical and managerial issues. Moreover, some possible opportunities are reported for future researchers by assuming the current flaws to carry out more research both within the Chinese market and rest of the regions, worldwide.

Evaluating diffusion in policy designs: A study of net metering policies in the United States

AbstractIn the United States, some of the most important environmental policy innovations of the past decades have occurred at the state level. Net metering policy is one kind of policy that states have widely adopted in support of decarbonization goals. The widespread adoption of net metering policies varying in policy design, defined here as policy content, offers an opportunity to investigate to what extent policies that diffuse widely bear comparable designs, and furthermore, what factors influence diffusion in policy designs. Availing these opportunities, in this paper, we investigate (1) how (dis‐)similar the designs of American states' original net metering policies were; and (2) what factors explain the diffusion of policies that share similar design elements. To support our investigation, we model using event history analysis in a directed dyad setting, the factors that explain differential duration to adoption of net metering legislation containing specific elements of design by policy receiver states. We find that bipartisan legislatures are more likely to adopt the majority of design elements. This suggests that net metering appeals to policy makers across the political spectrum and that the latter compromise in integrating elements of policy design that benefit or burden different constituents. We also find that over time, states become less likely to emulate policy designs from jurisdictions whose citizenry embraces dissimilar values, suggesting that policy makers learn to tailor incentives to their local policy targets.

The impact of environmental policy mechanisms on green innovation performance: the roles of environmental disclosure and political ties

Despite recognizing environmental policy mechanisms as critical drivers of green innovation, clarity is still needed regarding how and under what conditions they influence green innovation performance. Consequently, further investigation is warranted. This study addresses this research gap by examining the impact of environmental policy mechanisms, specifically command-control and market-based policy mechanisms, on green innovation performance. The study delves into the moderating role of political ties and the mediating effect of environmental disclosure (ED) by utilizing survey data from 499 heavy industries in the Republic of South Africa and drawing on the foundations of institutional and resource dependence theory. The findings shed light on the positive influence of command-control and market-based policy measures on ED. The Hayes process analysis reveals that the relationship between environmental policy mechanisms and green innovation performance is indirect and mediated by the level of ED A noteworthy discovery is made regarding the strengthening effect of political ties on the relationship between ED and green innovation performance. This study highlights the need for a greater emphasis on theoretical advancements and practical implications. By improving our understanding of the complex interplay between environmental policy, political ties, ED, and green innovation performance, this study contributes to the existing body of knowledge.

Impact of environmental policy on the innovation of SMEs: Chinese evidence

As environmental concerns continue to grow worldwide, the role of environmental policy in promoting sustainable development has become increasingly important. This study examines the impact of environmental policy on the innovation of small and medium-sized enterprises (SMEs) in China, a country where environmental regulation has been rapidly expanding in recent years. The analysis employs a regression model that controls for various firm-level and environmental factors that may affect innovation. A loan guarantee may boost an SME’s chances of acquiring borrowed funds, the number of loans obtained, expenses, capital equipment expenditures, and TFP by 2%, 17.4%, 7.6%, 6.16%, and 5.26%, respectively. Furthermore, the influence of information networks on performance is examined. Environmental policy and open innovation activity, opposite transfer, investor interactions, and SMEs’ success are all examined, with a focus on Chinese SMEs. The findings suggest that policymakers should consider designing more targeted and flexible environmental policies that provide incentives for SMEs to innovate and adopt sustainable practices, while minimizing potential negative impacts on their competitiveness and financial performance.

Environmental Protection Tax Policy and Green Innovation of Heavy-Polluting Enterprises: Evidence from China

Since 2018, China has implemented the Environmental Protection Tax as a market-based envi-ronmental regulation tool to encourage enterprises, especially heavy-polluting ones, to reduce emissions and engage in green innovation. The effectiveness of this policy in promoting green innovation has become a focal point of attention for Chinese society, as it directly relates to the coordinated high-quality development of the economy and environmental protection, as well as the achievement of China’s “carbon peaking and carbon neutrality goals”. This study evaluates the green innovation effect of the Environmental Protection Tax policy on heavy-polluting enterprises in China using micro-data of listed enterprises from 2003 to 2019, based on the new market-oriented environmental regulation tool. We employ the propensity score matching and differ-ence-in-differences method (PSM-DID) to follow up on the green innovation effect of China’s Environmental Protection Tax policy and reveal its implementation effect. Empirical results indicate that, first, the Environ-mental Protection Tax policy contributes to heavy-polluting enterprises’ R&D innovation of green patents, and this conclusion holds through various robustness tests. Second, the policy’s impact on green innovation types of heavy-polluting enterprises exhibits heterogeneity, with a more significant positive effect on the utility model patent than on the invention patent. Third, the green innovation effect of the policy differs ac-cording to regional economic development and enterprise ownership attributes. Finally, financing constraints do not significantly affect the green innovation of heavy-polluting enterprises. These enterprises remain pro-active in green innovation, even under high financing constraints. To further promote green innovation of heavy-polluting enterprises and achieve China’s dual carbon goals, the government should continue to imple-ment and improve the Environmental Protection Tax policy, leveraging its positive effect on green innovation.

Mexico City—Ambitions and Challenges of Integrated Risk Management in a Fractured Urban Planning Context

Among the growing number of megacities, Mexico City stands out for its size and population, but also for its challenges with respect to environmental risk management, fractured governance and marked contrasts in urban conditions. In the last couple of decades, Mexico City has been praised for pioneering new management structures for planning and policy development, driving an approach rooted in a strong social commitment and sustainability agenda, with more integrated decision-making across government institutions. Among these instruments is the recent Law of Integrated Risk Management and Civil Protection of Mexico City, which boldly steps ahead of national legislation, moving from a reactive to a precautionary approach to disaster risk under the banner of stakeholder co-responsibility. However, this paper shows that Mexico City has also been the stage of innovative policies that have been hijacked by the powerful, tainted by corruption and reinterpreted to fit financial interests, or simply abandoned with the arrival of new administrations. The efficiency of these innovative strategies has therefore thus far been limited by discretionary practices and poor communication and socialisation. Our research over the past 5 years has explored risk management processes in Mexico and Mexico City through a transdisciplinary investigation of the vulnerability to climate change-related hydro-meteorological risks in low-income urban areas, and the capacities to manage risk at the community and institutional levels. Drawing on this research, this paper describes a range of accomplishments in urban and environmental policy innovation in Mexico City in recent years with relevance to risk management, and the opportunities for learning arising from the challenges, limitations, and failures. The paper argues that, despite extensive existing knowledge of the socio-technical elements of risk in the city, in particular in relation to hydro-meteorological and seismic risks, fragmented urban development policies and institutions have contributed to increasing the vulnerability of poor communities in high-risk areas of the city. The paper concludes that addressing the challenges of integrated risk management in this fractured urban planning context will require that the recently-created institutions are adaptive, to cope with evolving socio-economic contexts and physical hazards, build strong links with academia to harness social and technical knowledge, design long-term plans integrated across tiers of government to increase coordination, and generate strong and inclusive engagement of the city’s heterogeneous communities. These elements are crucial to allow Mexico City’s ambitions of integrated risk management to survive political cycles and avoid appropriation by short-term financial interests over real risk reduction.

Dynamic interaction of renewable energy technological innovation, environmental regulation intensity and carbon pressure: Evidence from China

In 2020, China's carbon emissions were 10 billion tons, about 29% of global ones. As the largest carbon emitter in the world, China's heavy carbon emission pressure will affect not only its sustainable development, but also the global climate change situation and human survival. In order to achieve a positive interaction among renewable energy technological innovation, environmental regulation intensity and carbon pressure, and effectively alleviate China's carbon pressure, the dynamic interaction among the three aspects was investigated by taking 2008–2017 panel data of China mainland as the research sample, measuring carbon pressure level and renewable energy technological innovation, establishing panel vector autoregressive (PVAR) model, and adopting impulse response function and variance decomposition. It was found that a mutual promoting effect exists between renewable energy technological innovation and environmental regulation intensity, and also between renewable energy technological innovation and carbon pressure, while a mutual inhibiting effect between environmental regulation intensity and carbon pressure. The variance decomposition results show that carbon stress level has the highest contribution to the long-term variance of renewable energy technological innovation except for the variable itself, which is 10.2%. Renewable energy technological innovation has the highest variance contribution to environmental regulation intensity, which is 8.2%, and environmental regulation intensity has the highest variance contribution to carbon stress level, which is 28.1%. The conclusions of present study are helpful to clarify the dynamic interaction among renewable energy technological innovation, environmental regulation intensity and carbon pressure, further improve environmental regulation policy and renewable energy technological innovation R&D decision-making, and provide an effective way for China and the world to alleviate carbon pressure.

The cleaner production technology innovation effect of environmental regulation policy: evidence from China

PurposeEnvironmental regulation policy and cleaner production technology innovation are the key links to achieve sustainable economic development. This paper tests the impact of Two Control Zone (TCZ) environmental regulation policy on cleaner production technology innovation and explains the heterogeneity effect between them from the perspective of regional pollution intensity and R&D investment scale.Design/methodology/approachThis paper takes TCZ policy as an environmental regulation policy and collects the patent data related to coal desulfurization cleaner production technology innovation in prefecture-level cities from 1994 to 2002 in China. This paper also tests the relationship between TCZ environmental regulation policy and cleaner production technology innovation based on difference in difference (DID) model. Take regional R&D investment scale and pollution intensity as category variables and analyze the heterogeneity effect of TCZ environmental regulation policy on cleaner production technology innovation based on difference-in-difference-in-difference (DDD) model.FindingsTCZ environmental regulation policy effectively promotes China's cleaner production technology innovation, but it is more conducive to cleaner production technology innovation in heavy pollution areas. With the increasing of R&D investment scale, the positive effect of TCZ environmental regulation policy on cleaner production technology innovation is stronger.Research limitations/implicationsOn the basis of this study, the authors should further explore the regulatory factors of the relationship between TCZ environmental regulation policy and cleaner production technology innovation and further expand the research object, so as to make the research conclusions more practical and instructive.Originality/valueThis paper tests the impact of TCZ environmental regulation policy on cleaner production technology innovation based on the prefecture city level data and DID model, and it handles the endogenous problem caused by the missing variables and provides the accurate conclusions. Moreover, this paper examines the heterogeneity effect of TCZ environmental regulation policy on cleaner production innovation from regional R&D investment scale and pollution intensity two hands and expands the existing theoretical research.

Environmental policy, institutional quality and renewable energy technology innovation: An empirical analysis of 32 countries

Environmental policy, institutional quality and renewable energy technology innovation: An empirical analysis of 32 countries

Green building and policy innovation in the US Low-Income Housing Tax Credit programme

ABSTRACT This article analyses the integration of green building with the largest low-income housing production programme in the US and the innovativeness of state housing agencies. Drawing on policy innovation literature, panel data and regression analysis are employed to quantify associations between state-level characteristics and the adoption of green building criteria into the Low-Income Housing Tax Credit (LIHTC) programme. Results show that housing agencies have increasingly adopted green building criteria, and most have identified co-benefits from energy-efficient buildings and smart growth. Despite overall progress, the rate of adoption of green building criteria has decreased, few US states have comprehensive criteria, and many have dropped important criteria, such as on-site renewable energy generation, often due to perceived additional costs to developers and, in some cases, due to perceived progress in building codes. Results are consistent with hypotheses derived from the literature and suggest that the integration of green building with the LIHTC programme is significantly associated with the states’ internal factors, such as public housing agencies’ motivations and resources, and external factors like regional policy diffusion from other states. Future research should explore organization-level factors that affect environmental policy innovation.

Transformation of Congressional Lawmaking by the Clean Air Act Amendments of 1970 and Its Effects

From the 19th Century to the early 1970s the U.S. was consistently at the frontier of publicly relevant technology and policy advances. The Clean Air Act Amendments of 1970 (CAA) continued this tradition. However, the CAA transformed conventions for Congressional lawmaking in ways that had unintended negative effects on federal government operations, environmental management, and U.S. society. The CAA’s bipartisan framers came together at a time of environmental crisis and skepticism over federal regulators’ stewardship over the nation’s environment. Manufacturing and industry were prime sources of pollution. The framers feared that the formers’ economic and political power would influence regulators. The CAA therefore broke previous norms for lawmaking by giving the Environmental Protection Agency comprehensive national authority over air pollution and prescribing operational detail. In effect, Congress became the sheriff and the Environmental Protection Agency became the summons server for environmental policy. With powerful teeth, the CAA of 1970 and subsequent laws influenced by CAA precedents achieved rapid progress in controlling pollution. However, they replaced trust in federal agencies and cooperation between government and the private sector by regulations and punitive provisions, arousing antagonism in the business community. The results included deindustrialization, with mass exodus of business from manufacturing; litigiousness; barriers to innovation in environmental technology and policy; and perpetual battle over environmental regulation. Attempts by business and conservative-linked groups to reform regulatory policy were unsuccessful because they mainly sought inhibitions on the regulatory process. They failed to consider deep concerns of the environmental community and fundamental flaws in the regulatory system.

Environmental policy innovation in China and examining its dynamic relations with air pollution and economic growth using SEM panel data

Along with monitoring air pollution level and rapid economic growth in China, the government has paid attention to the environmental policy innovation (EPI) capacity of local governments. However, scholarly research has not yet clarified the ability of local governments in EPI and its related drivers and impacts. This study explores the dynamic relations between EPI, air pollution, and the economy for the first time, using the simultaneous equation model (SEM) in China during 2006-2015 across 30 provinces. To calculate EPI, this study introduces the comprehensive concept of policy innovation, consisting of invention, diffusion, and evaluation. The results show that EPI is strongly promoted by air pollution; however, promoting EPI alone cannot decrease air pollution. These results would vary among eastern and western provinces. Economic growth has a significant positive effect on EPI and can significantly reduce air pollution. This study suggests policymakers strengthen EPI in order to achieve a balance between air pollution and economic growth.

Dynamics of environmental policy and firm innovation: Asymmetric effects in Canada's oil and gas industries

Considering that Canada joined and then withdrew from the Kyoto Protocol, we assess the impact of the dynamics of Canada's environmental policy on the general innovation and environmental innovation of oil and gas firms. This study compensates for the shortcomings of the Porter hypothesis, which features no discussion of the influence of a loosened environmental policy on innovation. We highlight that the quantity and quality of innovation can be measured using the numbers of patents and citations of patents as proxy variables. We find that the dynamics of Canada's environmental policy have an asymmetric impact on oil and gas firms' innovation; strict policy promotes firm innovation and loose regulation reduces firm innovation, with the positive effect of strict policy being stronger than the negative effect of loose policy. In addition, environmental policy has a strong impact on environmental innovation. A loosened environmental policy increases the number of environmental patents but reduces the number of citations of environmental patents.

Flexible environmental policy, technological innovation and sustainable development of China’s industry: The moderating effect of environment regulatory enforcement

Abstract How to rely on market mechanism for achieving industrial sustainable development is an important issue both to current scholars and policymakers. Technological innovation is regarded as a mediator to construct a driving mechanism that flexible environmental policy affects sustainable development from the “narrow” perspective of Porter’s hypothesis. Meanwhile, environment regulatory enforcement is introduced as a moderator to explore the institutional scenario that drives sustainable development of China’s industry. Then we have adopted industrial panel data of 30 provinces in 2006–2015 and employed the sys-GMM method for empirical test. The findings show that: (1) flexible environmental policy can significantly facilitate industrial sustainable development. (2) Flexible environmental policy has a significantly positive impact on technological innovation. Meanwhile, technological innovation is significantly and positively related to industrial sustainable development, and technological innovation partially mediates the relationship between flexible environmental policy and industrial sustainable development. (3) Environment regulatory enforcement positively moderates the relationship between flexible environmental policy and technological innovation. However, it has a potentially positive but not significant moderating impact on the relationship between technological innovation and industrial sustainable development, indicating that there is still an “implementation gap”. (4) From a regional point of view, technological innovation has partly mediating effects between flexible environmental policy and industrial sustainable development in the eastern and western regions, and environmental regulatory enforcement can positively moderate the role of flexible environmental policy in promoting technological innovation in the eastern region. Finally, this paper puts forward the policy implications.

The means, motive and opportunity of devolved policy responses to an ecosystem approach

The ‘environment’ is a fully devolved concern in UK governance, though the comparative dynamics of devolved environmental governance remain poorly understood. The potential for the repatriation of significant environmental powers from the EU to devolved administrations through Brexit means that the nature of devolved environmental policy-making is increasingly coming under the spotlight. This paper enhances collective understanding about the nature of devolved environmental government and governance by adopting a comparative approach across the devolved nations of the UK. Based upon interviews and policy publications it analyses a number of key policy-making and institutional variables in relation to responses to an international environmental regime. In both Wales and Scotland evidence was found of environmental policy-making, policy-innovation and institution-building that diverged from the UK. Wales, in particular, evidenced how ‘the environment’ appears to be seen as a dynamic space for policy and institutional innovation. These findings highlight how the devolved-scale of governance might be particularly fruitful for environmental policy-innovation when the means, motive and opportunity are evident. It also highlights how key conditions are evident to ensure that devolved agencies may be empowered to undertake radically divergent approaches and programmes.

Panel Symposium: ""California Greenin:' How the Golden State Became an Environmental Leader

The purpose of this symposium is to bring together a group of scholars to critically engage and discuss the book California Greenin' : How the Golden State Became an Environmental Leader by David Vogel (Princeton University Press, 2018) This book which will be published in May 2018, describes the extensive history of environmental policy innovation in California and develops a set of explanations for why this particular state has long lead the United States in regulatory stringency, with many of its regulations subsequently adopted by the federal government and other states.

Monitoring and evaluation of regional industrial sustainability: Evidence from Italian regions

Industrial sustainability now appears to be moving up the management agenda in many organizations and thus countries, mainly focused on performance achieved at regional level. In this context, government becomes a significant driver of both environmental policy and technology innovation for firms, which are actually innovating their processes for improving the global sustainability of territories. However, these processes exhibit many difficulties linked to the presence of different guidelines, involved stakeholders and objectives in order to ensure a more sustainable territorial development. In order to evaluate industrial sustainability achieved at regional level, we propose a new approach based on a reappraisal of the classical SWOT analysis. By using multivariate analysis methodologies and a wider battery of indicators, this approach identifies homogeneous groups of regions and describes points of strength and weakness points for each one.The results obtained, as well as evaluating the achievements of regional sustainable industrial policy, provide a guide for the establishment of regional policies, according to European directives.

Environmental policy innovations in China: a critical analysis from a low-carbon city

ABSTRACTThe Chinese state is squarely ‘back’ in the business of environmental governance with an increasing number of policy innovations or experiments to resolve environmental issues. These have been mostly enacted through the ‘experimentation under hierarchy’ framework, undergirded by compensation-for-performance incentive structures for local agents. Based on on-site ethnography in local China, a critical analysis is presented of low-carbon city policy experiments – one of the most prominent environmental policies introduced in the past decade. Using lessons from the agency theory, it is hypothesized that outcomes of these policy innovations are contingent on different policy dimensions. Although a number of positive outcomes have been achieved in output-oriented dimensions, the fundamental difficulty of specifying all aspects of complex, multidimensional work tasks involved in low-carbon city development has frequently led to policy unmaking. The findings raise important questions about China’s tendency to rely excessively on compensation-for-performance structures to promote environmental policies.