Path to green development: the role environmental regulation and labor skill premium on green total factor energy efficiency

Abstract

Improving energy efficiency is critical to breaking the resource curse. Using the GML Productivity Index, we measured the China’s green total factor energy efficiency (GTFEE) and systematically explored the effects of environmental regulations on GTFEE. This article focuses on the threshold effect of environmental regulation (ER) on GTFEE at different skill premium levels. The conclusion shows that the impact of ER on GTFEE is expressed as a U-shaped relationship. ER can not only directly increase the skill premium, but also indirectly improve the GTFEE by increasing the skill premium. In addition, the threshold effect analysis suggests that skills premiums can enhance the role of ER in promoting GTFEE. Based on a new perspective on labor skills premiums, this study analyzes the mechanisms of environmental regulation to promote GTFEE, which has enlightening significance for improving the pollution control effect of ER and promoting carbon neutrality in China.