Can China’s Environmental Regulations Effectively Reduce Pollution Emissions?
Abstract
:1. Introduction
2. Literature Review
3. Models and Data
3.1. Models
3.1.1. Panel Smooth Transition (PSTR) Model
3.1.2. Panel Vector Auto Regressive (PVAR) Model
3.2. Data
3.2.1. Description of Each Variables
3.2.2. Calculation of Key Variables
- (1)
- Calculation of pollution
- (2)
- Calculation of er
- (3)
- Calculation of techg
- (4)
- Calculation of GDP
- (5)
- Calculation of FDI
4. Empirical Analysis
4.1. PSTR Model Analysis
- (1)
- Green technology progress and environmental regulation of emission reduction effect. The estimated results from the Model (1) indicate that the model has a positional parameter of 0.3123. The model is divided into two systems, with the observed value in the high system being 162, and the sample observation value in the low system 198. With the change of conversion variable techgit, the reduction elasticity of environmental regulation is smoothly converted between the high and low systems, and the rate of change is 7.6888. When techgit < 0.3123, the model is located in the low system, and environmental regulation increases pollution emissions. Environmental regulations increase pollution emissions by 0.0792 units per unit, but not significantly. When techgit > 0.312, the model is in a high system, and the elasticity coefficient of environmental regulation to pollutant emissions is −0.2581 (the elasticity coefficient is b0 + b1). An increase of 1 unit of environmental regulation reduces pollution emissions by 0.2581 units. Taking the average of technological progress in each province and city for 12 years, there are 14 provinces (i.e., Beijing, Tianjin, Liaoning, Shanghai, Jiangsu, Zhejiang, Anhui, Fujian, Shandong, Guangdong, Hainan, Chongqing, Ningxia, and Qinghai) are located in the high system. These areas have made technological progress of a cleaner type through lower energy consumption and waste emissions. Most other regions are eastern provinces and municipalities, with superior infrastructure conditions and factors, and their technological progress also favours the clean type. The remaining 16 provinces and cities are located in the low system, which shows that most provinces need to change the mode of economic development, reduce the level of energy consumption per unit, and improve environmental regulation, thereby reducing the intensity of pollution emissions.
- (2)
- Emission reduction effect of GDP and environmental regulation. The estimated results from Model (2) indicate that there is a positional parameter of 0.1931 and the model is divided into two systems. In this study, we take the natural logarithm of GDP and all observations are above the position parameters. With the change of conversion variable gdpit, the reduction elasticity of environmental regulation is smoothly converted between the high and low systems, and the rate of change is 30.1989. When gdpit < 0.1931, the model is located in the low system, and elasticity coefficient of environmental regulation to pollution emissions is 0.1594; that is, when the environmental regulation increases by 1 unit, pollution emissions reduce by 0.1594 units. When gdpit > 0.1931, the model is located in the high system, and the elasticity coefficient of environmental regulation to pollution emissions is 0.1454; that is, when the environmental regulation increases by 1 unit, pollution emissions reduce by 0.1454 units. It is noteworthy that when the model is located in the low system, the impact of environmental regulation on pollution emission is greater than in the high system, the total GDP of the low system is smaller, the cost of environmental regulation may exceed the scope of some enterprises, and the effect of implementation may be more obvious. However, the high system area, namely, the existing observation value, no longer blindly pursues economic growth, allows the enterprise to pay a certain environmental cost to carry on production, and implements the local environment regulation policy. Although the pursuit of high-intensity environmental regulation can effectively promote emissions reduction, it can increase sewage costs by a large amount for the normal operation of enterprises.
- (3)
- The emission reduction effect of FDI and environmental regulation. The estimated results from Model (3) indicate that there is a positional parameter of 0.0962, and the model is divided into two systems. The observed value in the high system is 354, and the observed value in the low system is 6. With the change of conversion variable FDIit, the reduction elasticity of environmental regulation is smoothly converted between the high and low systems, and the rate of change is 88.8741. When FDIit < 0.0962, the model is located in the low system, and the elasticity coefficient of environmental regulation to pollution emissions is −0.0003; that is, when environmental regulation increases by 1 unit, pollution emissions reduce by 0.0003 units, but it is not significant. When FDIit > 0.096, the model is in a high system, and the elasticity coefficient of environmental regulation to pollution emissions is −0.0353; that is, when the environmental regulation increases by 1 unit, pollution emissions decrease by 0.0353 units. Under the influence of FDIit, no matter what kind of system in which the model is located, increasing environmental regulation reduces pollution emissions. In recent years, China has developed a higher degree of openness to the outside world, attracting much high-quality foreign investment, improving the technology for reducing emissions, and preventing the inflow of high energy-consuming industries and backward industries to a large extent, so that the production of high-system environmental regulations is more obvious than that of low-system regulations. Even if some provinces and cities are located in the low-system stage, although the emission reduction effect is not significant, the local environmental regulation still shows the emission reduction effect.
4.2. Impulse Response Analysis
5. Discussion
- (1)
- The Chinese government should strongly support R&D for clean technology, such as encouraging leading new energy and new technology industries to vigorously strengthen their technology R&D, subsidise corresponding R&D funding, attract the inflow of technicians and actively promote the transformation of clean technology from research to application and further to large-scale production.
- (2)
- China’s government should accelerate the establishment of low-carbon and green growth models in some of backward regions, avoid repeating the "pollute first, treat later" model, raise the threshold of environmental regulations in backward regions to prevent pollution transfer, and establish a mechanism for the elimination of winners and losers among enterprises to prevent unqualified enterprises from entering the market.
- (3)
- Relevant government departments should implement regional policies for the introduction of FDI. The Chinese government should identify and control the quality of FDI through environmental regulation tools. It is necessary to provide policy support and tax incentives for clean FDI, impose appropriate fines for heavily polluting FDI, and gradually establish production incentives for green investment.
- (4)
- Relevant government departments should develop and implement different types of appropriately designed environmental regulatory instruments to achieve better emission reductions. Local governments should actively adjust their regulatory efforts according to economic development and the current environmental situation in order to leapfrog the turning point of some of the macro variables affecting emissions reduction. Each region should systematically try out progressive environmental regulation policies based on actual needs, economic characteristics and stage of development, especially in some inland underdeveloped regions, and set up a fund to support green development and provide financial support for the green transformation of industries in backward regions.
6. Conclusions
- (1)
- Under the effect of low-system technological progress, the increase of environmental regulation brings about no significant pollution emission increase, but it can significantly reduce pollution emissions under the effect of a high system of technological progress. Green technological progress at the beginning of the pollution-biased period corresponds to a large amount of pollutant emissions, so the environmental regulation increases. Enterprises facing higher sewage costs inspire their economic people characteristics through rent-seeking or free-rider behaviour to seek profits, not only to promote the level of current environmental regulation, but to increase their own pollution emissions. Clean technological progress improves the efficiency of technology and energy use in the production process, reducing the damage of production on the natural. Furthermore, clean technology progress has been developing and replacing pollution technology progress, effectively recycling resources, reducing pollution emissions of unit output, and lowering environmental regulation in the latter stage, but the research period has a slight rebound. The emission reduction effect of environmental regulation is more significant under the effect of high-system technological progress.
- (2)
- Under low-system economic growth, the implementation of environmental regulation can significantly reduce emissions, but it should be within the appropriate scope, while high-system economic growth reduces the emission reduction effect of environmental regulation. When the economy develops to a certain extent, in addition to environmental regulation, the role of other emission reduction measures is more obvious. For most of the study period, economic growth has led to a decrease in the speed of environmental regulation, which indicates that China began to focus on adopting appropriate environmental regulation measures, rather than high-intensity environmental regulation measures, to reduce the sewage cost of enterprises under high environmental regulation intensity, and to maintain the emission reduction effect of environmental regulation.
- (3)
- Under low-system FDI, environmental regulation has no significant emission reduction effect on pollution emissions, but under high-system FDI, there is a more obvious inflow of environmental regulations faced by a large number of foreign direct investors, which has a higher effect on emission reduction. FDI increases the degree of environmental regulation at the beginning of the study. From the second period, FDI increases reduce environmental regulations, but this change is slow. This may be due to the low quality of FDI flowing into China at the beginning of the period, accompanied by the transfer of backward industries. Although the degree of environmental regulation is high, the emission reduction effect of foreign capital is not high. In the later research period, the inflow of advanced technology reduces the intensity of environmental regulation, but greatly increases the efficiency of environmental regulation.
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Variable Category | Variables | Symbols | Unit | Data Sources |
---|---|---|---|---|
Dependent variable | pollution emission intensity | pollution | - | China Statistical Yearbook |
Independent variable | Environmental Regulation | er | % | China Environmental Statistics Yearbook |
Threshold variables | Green technology progress | Techg | - | China Statistical Yearbook |
Green Gross Domestic Product | GDP | Natural logarithm | ||
Foreign direct investment dependence | FDI | % |
Variables | Observation | Mean | Standard Error | Min | Max |
---|---|---|---|---|---|
pollution | 360 | 0.249 | 0.187 | 0.008 | 1.000 |
er | 360 | 0.492 | 0.243 | 0.000 | 0.997 |
techg | 360 | 0.374 | 0.203 | 0.152 | 1.173 |
gdp | 360 | 8.351 | 1.039 | 4.456 | 10.354 |
fdi | 360 | 2.392 | 1.948 | 0.028 | 11.809 |
Im-Pesaran-Skin Test | Augmented Dickey-Fuller Test | Phillips-Perron Test | |
---|---|---|---|
pollution | −2.5827 (0.0049) | 6.3653 (0.0000) | 6.3653 (0.0000) |
er | −4.0395 (0.0000) | 6.5238 (0.0000) | 6.5238 (0.0000) |
gdp | −4.0543 (0.0000) | 8.4371 (0.0000) | 7.4747 (0.0000) |
fdi | −2.6471 (0.0041) | 10.6568 (0.0000) | 3.9952 (0.0000) |
techg | −2.4480 (0.0072) | 7.5099 (0.0000) | 12.8959 (0.0000) |
Threshold Variables | H0:γ = 0 | H1:γ = 1 | H0:γ = 0 | H1:γ = 1 |
---|---|---|---|---|
Lagrange Mutiplicator (LM) | Fisher Lagrange Mutiplicator (LMF) | Lagrange Mutiplicator (LM) | Fisher Lagrange Mutiplicator (LMF) | |
techg | 18.834 *** | 18.162 *** | 0.015 | 0.013 |
(0.000) | (0.00) | (−0.903) | (−0.908) | |
gdp | 9.811 *** | 9.217 *** | 0.002 | 0.002 |
(−0.002) | (−0.003) | (−0.966) | (−0.967) | |
fdi | 4.666 ** | 4.320 ** | 0.149 | 0.136 |
(−0.031) | (−0.038) | (−0.699) | (−0.716) |
(1) techg | (2) gdp | (3) fdi | |
---|---|---|---|
Slope coefficient b0 | 0.0792 | −0.1594 *** | −0.0003 |
(−1.2578) | (−12.3715) | (−0.0218) | |
Slope coefficient b1 | −0.3373 *** | 0.0140 *** | −0.0350 *** |
(−4.1304) | (−4.2129) | (−2.6883) | |
Position parameter c | 0.3123 | 0.1931 | 0.0962 |
Conversion speed parameter r | 7.6888 | 30.1989 | 88.8741 |
Akaike information criterion (AIC) | −3.600 | −4.202 | −3.6888 |
Bayesian Information Criterion (BIC) | −3.556 | −4.159 | −3.645 |
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Chen, X.; Chen, Z. Can China’s Environmental Regulations Effectively Reduce Pollution Emissions? Int. J. Environ. Res. Public Health 2021, 18, 4658. https://doi.org/10.3390/ijerph18094658
Chen X, Chen Z. Can China’s Environmental Regulations Effectively Reduce Pollution Emissions? International Journal of Environmental Research and Public Health. 2021; 18(9):4658. https://doi.org/10.3390/ijerph18094658
Chicago/Turabian StyleChen, Xi, and Zhigang Chen. 2021. "Can China’s Environmental Regulations Effectively Reduce Pollution Emissions?" International Journal of Environmental Research and Public Health 18, no. 9: 4658. https://doi.org/10.3390/ijerph18094658