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The impact of environmental regulation on carbon emissions: Evidence from China

Author

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  • Ai, Hongshan
  • Tan, Xiaoqing
  • Zhou, Shengwen
  • Zhou, Yuhan
  • Xing, Hongye

Abstract

Carbon dioxide (CO2) emissions and climate change risk have become constraints on global economic sustainable development. Environmental regulation (ER) is a key method for achieving synergy in CO2 and pollution reduction in China. This paper is the first study to explore the effects of ER on CO2 emissions by exploiting the National Environmental Protection 11th Five-Year Plan (NEP11-FYP). The implementation of the NEP11-FYP significantly decreases CO2 emissions by 19.73% in key environmental cities relative to other cities. Heterogeneity analyses suggest that this negative impact is larger in western cities and cities with more pressure to reduce CO2 emissions. Scale effects, structural effects, and technical effects might be three potential influencing channels through which ER contributes to the CO2 reduction effect. In addition, the results of the spatial externality of the NEP11-FYP demonstrate a positive spillover effect in neighboring cities within a distance of 300 km and a negative spillover effect in cities more than 500 km away. Our empirical findings provide policy implications for implementing low-carbon transition strategies and reducing CO2 emissions.

Suggested Citation

  • Ai, Hongshan & Tan, Xiaoqing & Zhou, Shengwen & Zhou, Yuhan & Xing, Hongye, 2023. "The impact of environmental regulation on carbon emissions: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1067-1079.
    • Handle: RePEc:eee:ecanpo:v:80:y:2023:i:c:p:1067-1079
    DOI: 10.1016/j.eap.2023.09.032
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