Environmental Regulation and Carbon Emissions: “Forced Emission Reduction” or “Green Paradox”? Empirical Evidence from 272 Cities at or above Prefecture-Level in China

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Abstract

As the concept of green development takes deeper root, China’s environmental regulation model, which features the government as the linchpin supplemented by market forces, has emerged as a crucial springboard for driving continuous ecological improvement and building a beautiful nation. In this context, delving into the mechanics and mapping out the long-term road map of how environmental regulation can propel carbon emission cuts is an essential prerequisite for today’s ecological civilization drive. Based on the panel data of 272 cities at or above the prefecture level in China from 2003 to 2020, this paper uses the composite index method to measure the intensity of urban environmental regulation, and analyzes the spatiotemporal distribution pattern and evolutionary trend of total carbon emissions and environmental regulation intensity respectively. Spatial autoregressive model and mediating effect model are used to investigate the impact and transmission mechanism of environmental regulation on carbon emissions. On the basis of empirical analysis, conclusions are drawn as follows: first, environmental regulation can effectively inhibit carbon emissions, which strongly supports the “forced emission reduction theory”; second, technological progress plays a part of the mediating effect in the impact of environmental regulation on carbon emissions, which effectively supports Porter’s hypothesis; third, foreign investment plays a part of the mediating effect in the impact of environmental regulations on carbon emissions, which effectively supports the “pollution halo hypothesis”. Based on the above conclusions, this paper finally puts forward the relevant policy recommendations to achieve the goal of “dual carbon”.

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