Abstract
Comprehensive evaluation and identification of the critical regulatory determinants of carbon emission efficiency (CEE) are very important for China’s low-carbon transition. Accordingly, this paper first employs an undesirable global super-hybrid measure approach to calculate the CEE of China’s iron and steel industry (ISI). We then further use spatial error and threshold regression models to examine the spatial and non-linear effects of heterogeneous environmental regulations on CEE, respectively. Our empirical results show that (1) CEE varies significantly across China’s regions, with the eastern region having the highest CEE score, followed by the western and central regions, with the northeast region ranking the lowest; (2) command-and-control and market-incentive regulations both promote CEE, whereas the public participation approach does not significantly contribute to performance gains; (3) all three types of environmental regulations exhibit a non-linear threshold effect on CEE; (4) openness level, technological progress, and industrial concentration enhance efficiency gains, while urbanization level exerts a negative impact on CEE. Our findings have important implications for the design of environmental regulations.
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Notes
The ISI is one of the most important elements of a nation’s industrial economic infrastructure as all other industries depend on it for their machinery. In this study, the ISI refers to the sector involving the smelting and pressing of ferrous metals (Lin & Tan, 2016). In this sector, coal, coke and electricity are the main sources of energy depletion (Qi et al., 2021).
The PH is an important theoretical foundation of environmental regulations. It suggests that well-designed environmental regulations can promote innovation, improve resource utilization efficiency, increase firms’ competitiveness, and achieve better environmental outcomes, which, in turn, partially or completely offset the compliance costs of environmental regulation (Porter, 1991; Porter and Van der Linde, 1995).
The “three simultaneous” system (sometimes also translated as the ‘‘three simultaneities’’ or “three synchronous’’) requires explicit anticipation of the likely pollution associated with a project and for environmental protection measures to be designed, constructed, and operated simultaneously with the project’s main components to prevent or control pollution (Wang et al., 2003)
See Appendix A2 for details.
We have also added the regression results for each type of environmental regulation and using each of the two distance matrixes as a comparison (see columns (2), (3), (4), (6), (7), and (8)).
The pollution haven hypothesis posits that foreign direct investment (FDI) introduces environmental impacts due to pollution-intensive industries tending to move from developed countries to developing countries or regions with less regulatory stringency (Al-Mulali & Tang, 2013).
The rebound effect occurs when greater energy efficiency leads to an increase in industrial energy use (Jevons, 1865).
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The authors gratefully acknowledge financial support from the National Social Science Foundation of China (22BJY138).
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Wang, X., Chen, Y., Dong, Y. et al. How does environmental regulation impact low-carbon transition? Evidence from China’s iron and steel industry. Ann Oper Res (2023). https://doi.org/10.1007/s10479-023-05480-6
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DOI: https://doi.org/10.1007/s10479-023-05480-6