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Did carbon dioxide emission regulations inhibit investments? A provincial panel analysis of China

Environmental Science and Pollution Research volume 25, pages 27297–27306 (2018)Cite this article

Abstract

Investments, especially fixed asset investments, greatly affect carbon dioxide (CO2) emissions. When investments are concentrated in regions with high CO2 emissions and high fossil energy consumption, the CO2 emission reduction targets in these areas are difficult to reach in the short term, and the cost of CO2 emission abatement is high. The current CO2 emission regulations focus on existing production activities and consumption behaviors. However, whether an investment, which may affect CO2 emissions in the long term, is effectively inhibited by CO2 emission regulations has not been investigated in previous studies. Using panel data from 30 provinces in China between 2003 and 2012, we tested whether the amount of provincial investment was constrained or promoted by the provincial CO2 emission regulations by creating a panel model with provincial samples. The results revealed that CO2 emission regulations did not inhibit the growth of an investment, but they stimulated investments to varying degrees in different provinces. A relatively positive result is that provinces with stronger CO2 emission regulations exhibited a relatively small contribution to investment promotion, while provinces with weaker CO2 reduction policies demonstrated a relatively large contribution to investment growth. We also found that investment was correlated with the growth rate of the gross domestic product (GDP) in the northeastern and western provinces. Finally, we proposed policy implications based on the utilization of policy tools from the perspectives of investment, energy structure, and local protectionism.

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Funding

This study is supported by grants from the National Natural Science Foundation of China (Grants No. 71774149), Beijing Publicity and Culture High-level Talent Training Subsidy Program (Grant No. 2017XCB031) and the Beijing Social Science Foundation (Grant No. 16YJB031).

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Affiliations

  1. School of Economics and Management, China University of Geosciences (Beijing), Beijing, 100083, China

    Jianping Ge, Yalin Lei, Qun Xu & Xiangrong Ma

  2. Key Laboratory of Carrying Capacity Assessment for Resource and Environment, Ministry of Natural Resources, Beijing, 100083, China

    Jianping Ge & Yalin Lei

Authors
  1. Jianping Ge
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  2. Yalin Lei
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  3. Qun Xu
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  4. Xiangrong Ma
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Correspondence to Jianping Ge.

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Responsible editor: Philippe Garrigues

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Ge, J., Lei, Y., Xu, Q. et al. Did carbon dioxide emission regulations inhibit investments? A provincial panel analysis of China. Environ Sci Pollut Res 25, 27297–27306 (2018). https://doi.org/10.1007/s11356-018-2774-8

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  • DOI: https://doi.org/10.1007/s11356-018-2774-8

Keywords

  • Investment
  • Panel data
  • Emission regulation
  • Energy structure
  • China