1. Introduction
The impact of ecological changes and associated disasters caused by global warming is frequently felt. Nations around the world are initiating action to cope with the challenges posed by global warming. However, a majority of developing countries are faced with the dilemma of choosing between development and emission reduction. On the one hand, the prosperity of most developing countries depends on the development of the dirty industrial sector [
1,
2,
3], in which process energy supply and consumption is crucial [
4,
5]. On the other hand, the increase in energy consumption required for industrial production directly leads to large emissions measurable in terms of tons [
6], which not only diverge from environmentally beneficial greenhouse gas emission reduction, but also leads to a sustainable development crisis that constantly undermines the quality of economic development [
7].
It is obvious that environmental issues have been increasingly causing crises and disasters, thereby affecting the goals set by middle- and- low-income countries (MLIC) to achieve sustainable growth, as proposed by the United Nations [
8,
9,
10]. The impact of environmental externality, wherein, CE poses the most serious externality challenge [
11,
12], is a difficult issue that developing countries have been unable to solve at the present time [
13]. Emission of Greenhouse gases, 75% of which consists of carbon dioxide, is a direct cause of global warming [
14]. The use of fossil energy for human activities is closely associated with CE (Ali, et al., 2021) [
15], the global warming trend precipitated by the use of fossil energy threatens the entire human environment [
16]. Unlike the emissions of common pollutants, the warming caused by CE threatens all human society, in both developed as well as developing countries [
17]. Full coverage of such environmental externalities necessitates all countries to actively combat global warming [
18]. The Kyoto Protocol and the Paris Climate Agreement have been signed successively, wherein the signatory countries are expected to fulfill the main responsibility of CE inhibition, via confinement of the warming trend to 2 °C every century.
However, considering the overall scale of existing greenhouse gases, the current trend seen in global warming is expected to continue, as newly added CE keeps increasing year by year, bringing new CE reduction pressure. Based on the positive nexus between rapid economic growth and CE, emerging economies are replacing traditionally industrialized countries as the new entity, which acts as the main source of CE, with China becoming the world’s largest CE emitting economy with a share of 27.8% of the current CE (the data come from BP Statistical Yearbook of World Energy, 2019), bringing it under great pressure to reduce emissions. China is the largest developing country as well as the second largest economy worldwide, and thus its carbon reduction efforts may largely determine whether global CE curtailment targets can be achieved or not. The Chinese government signed the Kyoto Protocol in 2016 and pledged to reduce carbon dioxide levels by 18% per unit GDP by 2035. It also set the strategic goal of peaking carbon dioxide levels by 2030 as well as achieving carbon neutrality by 2060. Prior to this (since 2011), China had written the energy conservation and emission reduction (ECER) objective into the target responsibility of local governments, and implemented a series of emission reduction policies, which has attracted a great deal of attention and discussion [
19].
As an open and developing industrialized economy, China established a manufacturing sector, which provides large amounts of export oriented manufactured goods to ensure long-term and rapid economic growth [
20]. Nonetheless, China is highly dependent on coal and other traditional fossil energy sources [
21], resulting in energy consumption on a huge scale, thereby driving the scale of CE upwards [
22]. Reducing CE effectively while ensuring economic growth is a dilemma that confronts the Chinese government. This issue is heatedly debated by environmentalists, environmental scientists, environmental policy researchers and energy economics experts around the world [
6,
23,
24,
25,
26,
27,
28,
29].
Therefore, an examination of empirical evidence obtained from Guangdong province, which is a core region of China’s foreign investment and trade export, as well as an economically developed region, may help explore the effect of China’s energy policy implementation to solve the CE issue. There is a dramatic gap between the economic development capabilities of different regions in China, due to the vastness of the territory involved. Exports are primarily concentrated in the Pearl River Delta and Yangtze River Delta, leaving different regions to face diverse development and emission reduction pressures. Guangdong province is China’s largest export base and one of its fastest growing regions. As the biggest beneficiary of rapid industrialization, Guangdong province faces unprecedented pressure to cut emissions while achieving economic growth. China will continue to follow the trend of globalization, deepen opening-up and promote further development of its export-oriented economy. Reducing CE while maintaining rapid economic growth is a particularly acute problem confronting Guangdong province. This study investigated the public policy of WENGPP to deduce whether policy makers are promoting the low-carbon emission trade-off of NG by providing a public energy infrastructure, and subsequently utilized the RDD identification method to evaluate the long-term emission reduction effects of such policy implementation.
Developing, as well as developed, countries face disparate basic conditions when dealing with the pressure of ECER under the challenges posed by climate change. Developed countries, in particular, possess sufficient economic strength to cope with the high cost of emission reduction [
30], and have thus initiated a range of environmentally applicable technological innovations, including adopting a clean production mode and large-scale popularization of zero-carbon emission energy sources, such as nuclear power, wind power and photovoltaic to replace traditional fossil energy sources [
31]. With respect to CE reduction technology, they have actively carried out carbon burial and carbon sequestration to reduce surface carbon stocks. However, developing countries can neither afford the high costs of switching to cleaner production, nor assume the technological risks that need to be taken to reduce CE.
In contrast, rapid economic development in developing countries, is often accompanied by energy supply- and energy production-linked investments with growing energy consumption demands in economically open regions. To meet the needs of economic growth, it is necessary for governments to introduce a wider range of energy sources via large investments in energy infrastructure. However, with increasing ECER awareness prevalent in the society at large, developing countries have come to realize that increased energy consumption required for industrial production intuitively leads to large-scale emissions measured in terms of tons [
32], which not only diverges from environmental responsibilities associated with greenhouse gas emission reduction, but also erodes the quality of economic development associated with the sustainable development crisis [
33]. Limited by the technological path dependence of polluting production mode, most developing countries have no choice but to adopt gradual improvements to transform the high CE production in traditional industrial sectors into a low CE gray production mode, so as to maintain economic growth and to accumulate the economic strength needed to increase CE reduction at the next step. Sustainable growth is not only reflected in the gradual reduction in environmental pressure, but also by the stable growth rates achieved and the continuously adjusting industrial structure.
China vigorously constructed a large-scale program, WENGPP, from 2000 to 2017 to provide a backbone network supply for the large-scale popularization of NG in economically developed areas. NG pipelines were delivered from NG producing areas in western China to economically developed areas in eastern China, via a three-stage construction process, while NG importing pipelines from Central Asia were also connected, thereby forming sufficient network coverage to ensure that NG would be supplied to energy-short regions in China. Similar to those of most developing countries, China’s developed coastal regions with their export-oriented economic layouts have become poles of growth that promote rapid economic development. In reality, economic growth is closely linked with energy consumption. There is a strong demand for energy in economically developed areas, leading to the formation of an energy supply gap caused by the large amounts of exports processed, thereby creating a massive need for power that has to be purchased from abroad. Guangdong province accounts for the largest proportion of China’s exports, with its overseas trade volume reaching CNY 8.26803 trillion and its GDP reaching CNY 12.436967 trillion, accounting for 21.1% and 12.2% of China’s trade volume, respectively. Nevertheless, this province has had an energy supply shortage for a long time. WENGPP, which was connected to Guangdong province in 2012, successfully provided massive amounts of NG that were needed for the economic development of this region. Thus, the project displays extremely positive environmental externalities, which resulted in the substitution of NG for coal and other high CE energy sources, and effectively reduced CE levels in Guangdong province.
However, while a limited portion of the available literature focuses on emission reduction effects of WENGPP, a majority focuses on restrictive emission policies introduced by the Chinese government. Conversely, the restrictive environmental governance policies directed at CE attracted most of the attention of the public as well as researchers, while on the other hand, Porter’s hypothesis of weak environmental policy was also supported by sufficient evidence [
34]. Emission restriction policies force enterprises to seek and implement environmental technology innovations, where the government effectively provides market incentives to promote the improvement of emission reduction efficiency via institutional arrangements, such as emission trading ETS [
35,
36]. During the initial stages of WENGPP implementation, China did not realize the important effect of ECER, and thus the construction of NG pipelines was often regarded as a public policy pertaining to energy rather than a policy aimed at reducing environmental emissions [
37]. Notwithstanding the gradual development of consensus on CE reduction, increasing attention is being paid to a series of policy effects on low-carbon alternatives [
38].
NG supply provided by the government exerts multiple policy effects, including price comparison effects based on low-cost energy and low-carbon emission trade-off effects attributable to the NG alternative. According to Porter’s strong hypothesis, implementation of this policy tool exerted an economic effect [
39]. Although there is no significant comparative advantage associated with the price of NG, its combustion efficiency reaches 90%, which is more than twice that of coal (40%). Due to lower power utility costs associated with it, NG is considered the low-cost choice for industrial and civil energy. It confers a noticeable cost trade-off advantage as well as a much lower emission advantage, compared to widely used coal. The International Energy Agency indicates that CE generated by NG power generation is 0.39–0.44 kg/kwh, which is far less than that generated by coal (0.88–0.90 kg/kwh). Therefore, once NG is transported to Guangdong province, the market initiative replacement incentive will become sufficient, and CE reduction will become an activity with strong positive exogeneity. However, due to the limited availability of NG and the popularity of pipeline access, NG cannot be widely used. As Guangdong province lies far away from the NG supplier regions of western China, the energy shortage has limited further development of its local economy. WENGPP not only brings more extensive energy supply to Guangdong province, but also continues to play the crucial role of low-carbon emission trade-off via the introduction of NG, reducing the scale of regional CE.
At present, the limited literature focuses on the effect of WENGPP. Most studies concentrate on evaluating the corresponding social and economic benefits from the perspective of technology and engineering [
40,
41,
42], and do not pay serious attention to the effect of CE restraint brought on by WENGPP. Wu et al. [
43] investigated the ECER effect of WENGPP on central provinces, but did not provide empirical evidence that yields a convincing solution to the inquiry [
44], as to whether WENGPP effectively reduces the total scale of regional CE by focusing on energy transmission in developed regions.
7. Conclusions
The main objective of this study was to adopt a precise method that could be used to evaluate the effect of WENGPP implementation in Guangdong on CE reduction. Widespread utilization of NG is considered as a gray technology innovation approach used by developing countries to address emission reduction pressures and adopt sustainable development measures. WENGPP is a public policy instrument that aids the government to promote the popularity of low-carbon energy across the country, via the construction of public infrastructure for energy transmission. Based on a quasi-natural experiment using RDD strategy, we made a causal inference regarding the effect of WENGPP policy on the scale of CE in Guangdong, an economically developed region of China. The results indicated that WENGPP not only alters the short-term and long-term growth trend of CE in Guangdong, but also provides an effective energy supply to Guangdong, enabling further implementation of a more stringent emission restriction system and promoting high-quality economic growth.
More specifically, in terms of the CE reduction mechanism, the impact of WENGPP applies mainly in two ways: (i) through the low-carbon emission trade-off effect, wherein consumers who adopted NG conversion are able to achieve lower CE levels and gain emission advantages under an increasingly strict policy constraint trend; and (ii) through price comparison effect, where high combustion efficiency of consumed NG combines with low energy consumption costs to reduce a proportion of the original high energy consumption, linked to sources such as coal and crude oil in the emission structure, thus gradually promoting the optimization of regional emission structure.
Most developing countries that face the pressures of emission reduction, should abandon dirty production and follow approaches similar to WENGPP that utilize NG and other low-carbon energies to realize gray production. However, generating clean power is too expensive for most less developed countries where technical barriers limit its introduction and adoption [
94]. Under such circumstances, the example of NG substitution for purposes of emission reduction in Guangdong may provide an effective policy reference for developing countries, hoping to achieve emission reduction in economically developed areas [
95].
Based on the above findings, policy makers in other developing countries may refer to these policy implications in order to improve the low-carbon emission trade-off strategy of emission reduction:
Firstly, policy makers should vigorously promote consumption of low-carbon energy such as NG. There is a need to complete the construction of energy transmission and distribution infrastructure at the national level. Moreover, the market advantage of low-carbon energy utilization will drive enterprises to spontaneously prefer NG, although the high cost of transportation facilities and the entire design of distribution grip is overwhelming meant for the private sector. The government only provides NG access services through long-term energy construction plans, which will significantly enhance the low-carbon emission trade-off effect.
Secondly, it is essential to rationalize the mechanism of market price via NG input in developing countries. Intercontinental differences that exist between NG prices worldwide lead to drastic fluctuations in NG costs. Thus, state-dominated NG purchases can greatly reduce its cost, whereas the rigidity of the domestic market price will lead to low efficiency or excessive use of NG, which is not conducive to the development of the domestic energy economy and CE reduction. A flexible domestic NG price market is an effective way to use market mechanisms, in a manner which encourages ECER.
Lastly, optimization of the local economic structure may initiate continuous improvement of emission structure. Developed regions should not only curb their own CE, but also prevent the relocation of energy-intensive and high emission industries from raising CE elsewhere. Therefore, maintaining the intensity of CE reduction policies in various places in China and reducing the formation of “pollution heaven“ may enable the benefits associated with the entire emission reduction effort to be realized.
This study analyzes the impact of WENGPP on the scale of CE in Guangdong province and reveals the mechanism and methodology leading to its realization. However, some limitations may affect these efforts. Firstly, Guangdong province was selected from the second batch of WENGPP connected provinces, although Jiangsu and other provinces in the Yangtze River Delta had already been connected to WENGPP since 2009. There is some doubt as to whether the ECER effect on Guangdong is representative, compared to the former 10 provinces and regions selected during the first phase of ventilation. If relevant data for the full sample of provinces in China are available for future evaluation, we will further explore the impact of WENGPP policy at the state-level and evaluate heterogeneity characteristics. Furthermore, the local government environmental accountability system was implemented in 2011, and the ECER policy was included in the government’s development goals. The policy effect will alter the implementation intensity of the original emission restriction policy tools. Moreover, after China signed the Paris Climate Agreement in 2016, a series of environmental regulations and market-oriented emission reduction tools, such as ETS were introduced. Whether the impact of these policies affected Guangdong needs further evaluation. Finally, theoretically, NG connection exerts a significant effect on regional CE, SO2 emissions and PM2.5 air particulate emissions. Research studies that further explore other environmental emission reduction effects caused by WENGPP connection, will expectedly enrich empirical evidence gathered from existing research.