Impact of Environmental Regulation and Technical Progress on Industrial Carbon Productivity: An Approach Based on Proxy Measure

This research aims to study the main influencing factors of China’s industrial carbon productivity by incorporating environmental regulation and technical progress into an econometric model. The paper focuses on data from 35 of China’s industrial sectors and covers the period from 2006 to 2014, in order to examine the impact of environmental regulation and technical progress on carbon productivity. Methods applied include panel fixed effect model, panel random effect model and two stage least squares with instrumental variables (IV-2SLS). The effect of environmental regulation and technical progress has industrial heterogeneity. The paper subdivides industrial sectors into capital and technology intensive, resource intensive and labor intensive sectors according to factor intensiveness. The estimation results of the subgroups have uncovered that for capital and technology intensive and resource intensive sectors, environmental regulation has a more significant impact than technical progress; while for labor intensive sectors, innovation more significantly influences carbon productivity. In addition, foreign direct investment (FDI) and industrialization level facilitate improving carbon productivity for the full sample. By contrast, industrial structure inhibits the overall industrial carbon productivity. The industry-specific results indicate that for capital and technology intensive sectors, optimizing of the industrial structure can improve carbon productivity; for resource intensive sectors, FDI and energy consumption structure should be emphasized more; for labor intensive sectors, industrialization levels help enhance carbon productivity. Finally the industrial sector-specific policy suggestions are proposed.

[1]  Dongxiao Niu,et al.  Three-dimensional decomposition models for carbon productivity , 2012 .

[2]  Osman Zaim,et al.  Environmental efficiency in carbon dioxide emissions in the OECD: A non-parametric approach , 2000 .

[3]  D. Wheeler,et al.  In Search of Pollution Havens? Dirty Industry in the World Economy, 1960 to 1995 , 1998 .

[4]  Chaofeng Shao,et al.  Performance and decomposition analyses of carbon emissions from industrial energy consumption in Tianjin, China , 2014 .

[5]  Xiao Wei,et al.  Dynamic total factor carbon emissions performance changes in the Chinese transportation industry , 2015 .

[6]  Jing Deng,et al.  CO2 emission from China's energy sector and strategy for its control , 2010 .

[7]  Heike Wetzel,et al.  Transport and CO2: Productivity Growth and Carbon Dioxide Emissions in the European Commercial Transport Industry , 2012 .

[8]  Shaun S. Wang,et al.  Measuring carbon dioxide emission performance in Chinese provinces: A parametric approach , 2013 .

[9]  Ruyin Long,et al.  Spatial econometric analysis of China’s province-level industrial carbon productivity and its influencing factors , 2016 .

[10]  Z. Griliches.  Patent Statistics as Economic Indicators: a Survey , 1990 .

[11]  Robert J. Elliott,et al.  Determining the trade–environment composition effect: the role of capital, labor and environmental regulations , 2003 .

[12]  P. Zhou,et al.  Total-factor carbon emission performance of the Chinese transportation industry: A bootstrapped non-radial Malmquist index analysis , 2015 .

[13]  Mingxing Sun,et al.  Greenhouse gas emissions estimation and ways to mitigate emissions in the Yellow River Delta High-efficient Eco-economic Zone, China , 2014 .

[14]  Sue J. Lin,et al.  Structural decomposition of industrial CO2 emission in Taiwan: an input-output approach , 1998 .

[15]  Tao Sun,et al.  Effect of Population Structure Change on Carbon Emission in China , 2016 .

[16]  B. Dawson,et al.  INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE (IPCC) , 2008 .

[17]  Yi-Ming Wei,et al.  Sources of energy productivity change in China during 1997–2012: A decomposition analysis based on the Luenberger productivity indicator , 2016 .

[19]  M. Kortelainen,et al.  Dynamic environmental performance analysis: A Malmquist index approach , 2008 .

[20]  B. Davidsdottir,et al.  The odd couple: The relationship between state economic performance and carbon emissions economic intensity , 2011 .

[21]  E. Rosa,et al.  STIRPAT, IPAT and ImPACT: analytic tools for unpacking the driving forces of environmental impacts , 2003 .

[22]  Chunlu Liu,et al.  Carbon productivity: a case study in the Australian construction industry , 2016 .

[23]  Théophile T. Azomahou,et al.  Economic Development and Co2 Emissions: A Nonparametric Panel Approach , 2006 .

[24]  Ilhan Ozturk,et al.  Testing Environmental Kuznets Curve hypothesis in Asian countries , 2015 .

[25]  Y. Kaya,et al.  Environment, Energy and Economy: Strategies for Sustainability , 1999 .

[26]  B. W. Ang,et al.  Total factor carbon emission performance: A Malmquist index analysis , 2010 .

[27]  Guanghui Zhou,et al.  A study of carbon dioxide emissions performance of China's transport sector , 2013 .

[28]  Xingping Zhang,et al.  Exploring the Changes of Carbon Emissions Performance Using Data Envelopment Analysis , 2013 .