Advertisement

Can a low-carbon development path achieve win-win development: evidence from China’s low-carbon pilot policy

  • Cenjie Liu
  • Zhongbao ZhouEmail author
  • Qing Liu
  • Rui XieEmail author
  • Ximei Zeng
Article

Abstract

Low-carbon pilot (LCP) policy aims to not only achieve economic development but also address climate change problems in China. With a difference-in-difference (DID) approach, this study provides empirical evidence to support the policy’s implementation by analysing its impacts on green total factor productivity (GTFP). We find that the implementation of the low-carbon pilot policy has a significant positive impact on GTFP. The low-carbon pilot policy significantly improves the GTFP in the year following implementation, and its efficacy diminishes over time. In terms of mechanism analysis, the policy enables China to achieve win-win development through industry structure adjustment and foreign direct investment (FDI) inflows. Innovation does not immediately improve GTFP, although the low-carbon pilot policy promotes regional innovation. Our results provide strong support for China’s recent third set of low-carbon pilot policies. As for global mitigation strategy, countries should incorporate the low-carbon development path into their strategic planning. In particular, developing countries should enforce more efforts on low-carbon development as such development path may improve their green productivity. It helps narrow the gap between developing and developed countries.

Keywords

Low carbon pilot policy Win-win development Green total factor productivity Difference-in-difference 

Notes

Funding information

This study received financial support from the National Natural Science Foundation of China (Nos. 71771082, 71371067, 71420107027 and 71673083) and Hunan Provincial Natural Science Foundation of China (No. 2017JJ1012).

References

  1. Alder S, Shao L, Zilibotti F (2016) Economic reforms and industrial policy in a panel of Chinese cities. J Econ Growth 21(4):305–349.  https://doi.org/10.1007/s10887-016-9131-x CrossRefGoogle Scholar
  2. Ambec S, Cohen MA, Elgie S, Lanoie P (2013) The Porter hypothesis at 20: can environmental regulation enhance innovation and competitiveness? Rev Environ Econ Policy 7(1):2–22.  https://doi.org/10.1093/reep/res016 CrossRefGoogle Scholar
  3. Bai Y, Hua CC, Jiao JL, Yang M, Li FY (2018) Green efficiency and environmental subsidy: evidence from thermal power firms in China. J Clean Prod 188:49–61.  https://doi.org/10.1016/j.jclepro.2018.03.312 CrossRefGoogle Scholar
  4. Banker RD, Charnes A, Cooper WW (1984) Some models for estimating technical and scale inefficiencies in data envelopment analysis. Manag Sci 30(9):1078–1092.  https://doi.org/10.1287/mnsc.30.9.1078 CrossRefGoogle Scholar
  5. Berman E, Bui LTM (2001) Environmental regulation and productivity: evidence from oil refineries. Rev Econ Stat 83(3):498–510.  https://doi.org/10.1162/00346530152480144 CrossRefGoogle Scholar
  6. Berrone P, Fosfuri A, Gelabert L, Gomez-Mejia LR (2013) Necessity as the mother of ‘green’inventions: Institutional pressures and environmental innovations. Strateg Manag J 34(8):891–909.  https://doi.org/10.1002/smj.2041 CrossRefGoogle Scholar
  7. Brännlund R, Lundgren T, Marklund PO (2014) Carbon intensity in production and the effects of climate policy-evidence from Swedish industry. Energ Policy 67:844–857.  https://doi.org/10.1016/j.enpol.2013.12.012 CrossRefGoogle Scholar
  8. Cai X, Lu Y, Wu M, Yu LH (2016) Does environmental regulation drive away inbound foreign direct investment? Evidence from a quasi-natural experiment in China. J Dev Econ 123:73–85.  https://doi.org/10.1016/j.jdeveco.2016.08.003 CrossRefGoogle Scholar
  9. Chen Z, Kahn ME, Liu Y, Wang Z (2018) The consequences of spatially differentiated water pollution regulation in China. J Environ Econ Manag 88:468–485.  https://doi.org/10.1016/j.jeem.2018.01.010 CrossRefGoogle Scholar
  10. Chung S (2014) Environmental regulation and foreign direct investment: evidence from South Korea. J Dev Econ 108:222–236.  https://doi.org/10.1016/j.jdeveco.2014.01.003 CrossRefGoogle Scholar
  11. Coelli T (1998) A multi-stage methodology for the solution of orientated DEA models. Oper Res Lett 23(3):143–149.  https://doi.org/10.1016/S0167-6377(98)00036-4 CrossRefGoogle Scholar
  12. Cole MA, Elliott RJR, Shimamoto K (2005) Industrial characteristics, environmental regulations and air pollution: an analysis of the UK manufacturing sector. J Environ Econ Manag 50(1):121–143.  https://doi.org/10.1016/j.jeem.2004.08.001 CrossRefGoogle Scholar
  13. David M, Sinclair-Desgagné B (2005) Environmental regulation and the eco-industry. J Regul Econ 28(2):141–155.  https://doi.org/10.1007/s11149-005-3106-8 CrossRefGoogle Scholar
  14. Duan H, Zhang G, Wang S, Fan Y (2019) Robust climate change research: a review on multi-model analysis. Environ Res Lett 14(3):033001.  https://doi.org/10.1088/1748-9326/aaf8f9 CrossRefGoogle Scholar
  15. Fukuyama H, Weber WL (2009) Output slacks-adjusted cost efficiency and value-based technical efficiency in DEA models. J Oper Res Soc Jpn 52(2):86–104.  https://doi.org/10.15807/jorsj.52.86 CrossRefGoogle Scholar
  16. Ge JL, Fu Y, Xie R, Liu Y, Mo WY (2018) The effect of GVC embeddedness on productivity improvement: from the perspective of R&D and government subsidy. Technol Forecast Soc 135:22–31.  https://doi.org/10.1016/j.techfore.2018.07.057 CrossRefGoogle Scholar
  17. Gray WB (1987) The cost of regulation: OSHA, EPA and the productivity slowdown. Am Econ Rev 77(5):998–1006Google Scholar
  18. Greenstone M, List JA, Syverson C (2012) The effects of environmental regulation on the competitiveness of US manufacturing. National Bureau of Economic ResearchGoogle Scholar
  19. Grimes P, Kentor J (2003) Exporting the greenhouse: foreign capital penetration and CO? Emissions 1980 1996. Journal of World-systems Research 9(2):261–275CrossRefGoogle Scholar
  20. Hamamoto M (2006) Environmental regulation and the productivity of Japanese manufacturing industries. Resour Energy Econ 28(4):299–312.  https://doi.org/10.1016/j.reseneeco.2005.11.001 CrossRefGoogle Scholar
  21. Han F, Xie R, Fang JY, Liu Y (2018) The effects of urban agglomeration economies on carbon emissions: evidence from Chinese cities. J Clean Prod 172:1096–1110.  https://doi.org/10.1016/j.jeem.2014.06.005 CrossRefGoogle Scholar
  22. Hering L, Poncet S (2014) Environmental policy and exports: evidence from Chinese cities. J Environ Econ Manag 68(2):296–318.  https://doi.org/10.1016/j.jeem.2014.06.005 CrossRefGoogle Scholar
  23. Jiang W (2015) Could a less developed city solve its CO2 emission dilemma? Evidence from a low carbon pilot city. Chin J Urban Environ Stud 3(01):1–20.  https://doi.org/10.1142/S2345748115500074 CrossRefGoogle Scholar
  24. Khanna N, Fridley D, Hong L (2014) China's pilot low-carbon city initiative: a comparative assessment of national goals and local plans. Sustain Cities Soc 12:110–121.  https://doi.org/10.1016/j.scs.2014.03.005 CrossRefGoogle Scholar
  25. Kheder SB, Zugravu N (2012) Environmental regulation and French firms location abroad: an economic geography model in an international comparative study. Ecol Econ 77:48–61.  https://doi.org/10.1016/j.ecolecon.2011.10.005 CrossRefGoogle Scholar
  26. Korhonen J, Pätäri S, Toppinen A, Tuppura A (2015) The role of environmental regulation in the future competitiveness of the pulp and paper industry: the case of the sulfur emissions directive in Northern Europe. J Clean Prod 108:864–872.  https://doi.org/10.1016/j.jclepro.2015.06.003 CrossRefGoogle Scholar
  27. Kou ZL, Liu XY (2017) FIND Report on City and Industrial Innovation in China, Fudan Institute of Industrial Development. Fudan University, School of EconomicsGoogle Scholar
  28. Kudamatsu M (2012) Has democratization reduced infant mortality in sub-Saharan Africa? Evidence from micro data. J Eur Econ Assoc 10(6):1294–1317.  https://doi.org/10.1111/j.1542-4774.2012.01092.x CrossRefGoogle Scholar
  29. Kwakwa PA, Alhassan H, Aboagye S (2018) Environmental Kuznets curve hypothesis in a financial development and natural resource extraction context: evidence from Tunisia. Quantitative Finance and Economics 2(4):981–1000.  https://doi.org/10.3934/QFE.2018.4.981 CrossRefGoogle Scholar
  30. Li K, Lin B (2015) Metafroniter energy efficiency with CO2 emissions and its convergence analysis for China. Energy Econ 48:230–241.  https://doi.org/10.1016/j.eneco.2015.01.006 CrossRefGoogle Scholar
  31. Li K, Lin B (2016) Impact of energy conservation policies on the green productivity in China’s manufacturing sector: evidence from a three-stage DEA model. Appl Energy 168:351–363.  https://doi.org/10.1016/j.apenergy.2016.01.104 CrossRefGoogle Scholar
  32. Li S, Wang S (2019) Examining the effects of socioeconomic development on China’s carbon productivity: a panel data analysis. Sci Total Environ 659:681–690.  https://doi.org/10.1016/j.scitotenv.2018.12.409 CrossRefGoogle Scholar
  33. Li B, Wu S (2017) Effects of local and civil environmental regulation on green total factor productivity in China: a spatial Durbin econometric analysis. J Clean Prod 153:342–353.  https://doi.org/10.1016/j.jclepro.2016.10.042 CrossRefGoogle Scholar
  34. Li H, Lu Y, Zhang J, Wang TY (2013) Trends in road freight transportation carbon dioxide emissions and policies in China. Energ Policy 57:99–106.  https://doi.org/10.1016/j.enpol.2012.12.070 CrossRefGoogle Scholar
  35. Liang CY (2009) Industrial structure changes and the measurement of total factor productivity growth: the Krugman-Kim-Lau-Young Hypothesis revisited. Academia Economic Papers 37:305–338Google Scholar
  36. Mulia R, Widayati A, Agung P, Zulkarnain MT (2014) Low carbon emission development strategies for Jambi, Indonesia: simulation and trade-off analysis using the FALLOW model. Mitig Adapt Strat Gl 19(6):773–788.  https://doi.org/10.1007/s11027-013-9485-8 CrossRefGoogle Scholar
  37. NDRC (2010) Notice of the national development and reform commission on launching low carbon provinces and cities pilot. National Development and Reform of ChinaGoogle Scholar
  38. NDRC (2017) Notice of the national development and reform commission on launching the third batch pilot of low carbon cities. National Development and Reform of ChinaGoogle Scholar
  39. Newman C, Rand J, Talbot T, Tarp F (2015) Technology transfers, foreign investment and productivity spillovers. Eur Econ Rev 76:168–187.  https://doi.org/10.1016/j.euroecorev.2015.02.005 CrossRefGoogle Scholar
  40. Porter ME, Van der Linde C (1995) Toward a new conception of the environment-competitiveness relationship. J Econ Perspect 9(4):97–118.  https://doi.org/10.1257/jep.9.4.97 CrossRefGoogle Scholar
  41. Ramanathan R (2002) Combining indicators of energy consumption and CO2 emissions: a cross-country comparison. International Journal of Global Energy Issues 17(3):214–227.  https://doi.org/10.1504/IJGEI.2002.000941 CrossRefGoogle Scholar
  42. Rassier DG, Earnhart D (2010) The effect of clean water regulation on profitability: testing the Porter hypothesis. Land Econ 86(2):329–344.  https://doi.org/10.3368/le.86.2.329 CrossRefGoogle Scholar
  43. Raymond W, Mairesse J, Mohnen P, Palm F (2015) Dynamic models of R & D, innovation and productivity: panel data evidence for Dutch and French manufacturing. Eur Econ Rev 78:285–306.  https://doi.org/10.1016/j.euroecorev.2015.06.002 CrossRefGoogle Scholar
  44. Ren S, Li X, Yuan BL, Li DY, Chen XH (2018) The effects of three types of environmental regulation on eco-efficiency: A cross-region analysis in China. J Clean Prod 173:245–255.  https://doi.org/10.1016/j.jclepro.2016.08.113 CrossRefGoogle Scholar
  45. Rogge KS, Schneider M, Hoffmann VH (2011) The innovation impact of the EU Emission Trading System—findings of company case studies in the German power sector. Ecol Econ 70(3):513–523.  https://doi.org/10.1016/j.ecolecon.2010.09.032 CrossRefGoogle Scholar
  46. Rubashkina Y, Galeotti M, Verdolini E (2015) Environmental regulation and competitiveness: empirical evidence on the Porter Hypothesis from European manufacturing sectors. Energ Policy 83:288–300.  https://doi.org/10.1016/j.enpol.2015.02.014 CrossRefGoogle Scholar
  47. Shao LG, He YY, Feng C, Zhang SJ (2016) An empirical analysis of total-factor productivity in 30 sub-sub-sectors of China’s nonferrous metal industry. Res Policy 50:264–269.  https://doi.org/10.1016/j.resourpol.2016.10.010 CrossRefGoogle Scholar
  48. Shi X, Xu Z (2018) Environmental regulation and firm exports: evidence from the eleventh Five-Year Plan in China. J Environ Econ Manag 89:187–200.  https://doi.org/10.1016/j.jeem.2018.03.003 CrossRefGoogle Scholar
  49. Skoczkowski T, Bielecki S, Węglarz A, Włodarczak M, Gutowski P (2018) Impact assessment of climate policy on Poland’s power sector. Mitig Adapt Strat Gl 23(8):1303–1349.  https://doi.org/10.1007/s11027-018-9786-z CrossRefGoogle Scholar
  50. Stavropoulos S, Wall R, Xu Y (2018) Environmental regulations and industrial competitiveness: evidence from China. Appl Econ 50(12):1378–1394.  https://doi.org/10.1080/00036846.2017.1363858 CrossRefGoogle Scholar
  51. Tanaka S, Yin W, Jefferson GH (2014) Environmental regulation and industrial performance: evidence from China. Work. Pap., Tufts Univ., MedfordGoogle Scholar
  52. Tang D, Tang J, Xiao Z, Ma TY, Bethel BJ (2017) Environmental regulation efficiency and total factor productivity-effect analysis based on Chinese data from 2003 to 2013. Ecol Indic 73:312–318.  https://doi.org/10.1016/j.ecolind.2016.08.040 CrossRefGoogle Scholar
  53. Tone K (2001) A slacks-based measure of efficiency in data envelopment analysis. Eur J Oper Res 130(3):498–509.  https://doi.org/10.1016/S0377-2217(99)00407-5 CrossRefGoogle Scholar
  54. Walter I, Ugelow JL (1979) Environmental policies in developing countries. Ambio 8(2):102–109Google Scholar
  55. Wang J, Dong K (2019) What drives environmental degradation? Evidence from 14 Sub-Saharan African countries. Sci Total Environ 656:165–173.  https://doi.org/10.1016/j.scitotenv.2018.11.354 CrossRefGoogle Scholar
  56. Wang YF, Song QJ, He JJ, Qi Y (2015) Developing low-carbon cities through pilots. Clim Pol 15(1):81–103.  https://doi.org/10.1080/14693062.2015.1050347 CrossRefGoogle Scholar
  57. Wang SJ, Zeng JY, Liu XP (2019) Examining the multiple impacts of technological progress on CO2 emissions in China: a panel quantile regression approach. Renew Sust Energ Rev 103:140–150.  https://doi.org/10.1016/j.rser.2018.12.046 CrossRefGoogle Scholar
  58. Wanlley W (1994) The contribution of environmental regulations to slowdown in productivity growth. J Environ Manag 8(4):381–390.  https://doi.org/10.1016/0095-0696(81)90048-6 CrossRefGoogle Scholar
  59. Wei YP (2016) 52 cities are applying to be the third batch of LCCPs, and they will set carbon peak targets. Beijing: The 21st Century Economic Report.Google Scholar
  60. Xie R, Fang JY, Liu CJ (2017) The effects of transportation infrastructure on urban carbon emissions. Appl Energy 196:199–207.  https://doi.org/10.1016/j.apenergy.2017.01.020 CrossRefGoogle Scholar
  61. Zhang N, Wei X (2015) Dynamic total factor carbon emissions performance changes in the Chinese transportation industry. Appl Energy 146:409–420.  https://doi.org/10.1016/j.apenergy.2015.01.072 CrossRefGoogle Scholar
  62. Zhang YJ, Peng YL, Ma CQ, Shen B (2017) Can environmental innovation facilitate carbon emissions reduction? Evidence from China. Energ Policy 100:18–28.  https://doi.org/10.1016/j.enpol.2016.10.005 CrossRefGoogle Scholar
  63. Zhao X, Sun B (2016) The influence of Chinese environmental regulation on corporation innovation and competitiveness. J Clean Prod 112:1528–1536.  https://doi.org/10.1016/j.jclepro.2015.05.029 CrossRefGoogle Scholar
  64. Zhao L, Lin J, Zhu J (2015) Green total factor productivity of hog breeding in China: application of SE-SBM Model and Grey Relation Matrix. Pol J Environ Stud 24(1):403–412Google Scholar
  65. Zhou Y, Xing XP, Fang KN, Liang DP, Xu CL (2013) Environmental efficiency analysis of power industry in China based on an entropy SBM model. Energ Policy 57:68–75.  https://doi.org/10.1016/j.enpol.2012.09.060 CrossRefGoogle Scholar
  66. Zhu X, Chen Y, Feng C (2018) Green total factor productivity of China’s mining and quarrying industry: a global data envelopment analysis. Res Policy 57:1–9.  https://doi.org/10.1016/j.resourpol.2017.12.009 CrossRefGoogle Scholar

Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  1. 1.School of Engineering ManagementHunan University of Finance and EconomicsChangshaChina
  2. 2.School of Business AdministrationHunan UniversityChangshaChina
  3. 3.School of Economy and TradeHunan UniversityChangshaChina

Personalised recommendations