How Environmental Regulation Affects Pollution Reduction and Carbon Reduction Synergies—An Empirical Analysis Based on Chinese Provincial Data

Abstract

Faced with the dual challenges of environmental pollution and climate change, it is of great significance to study the impact of relevant environmental regulations on the synergistic effect of pollution reduction and carbon emission reduction and their influence mechanisms. Based on a theoretical analysis using the panel data of 30 provinces in China, a spatial econometric model and an intermediary effect model are used to investigate the impact of environmental regulations on the synergistic effect of pollution reduction and carbon reduction and the transmission mechanisms potentially responsible for these effects. The empirical results show the following: (1) The three kinds of environmental regulation effectively facilitate the synergistic effect of pollution reduction and carbon reduction, taking the following order when ranked according to the intensity of their effects: command-type environmental regulation (ER1) > market-based environmental regulation (ER2) > voluntary environmental regulation (ER3). (2) Environmental regulation effectively promotes the synergistic effect of pollution and carbon reduction through the three transmission mechanisms of stimulating technological innovation (TI), industrial structure upgrading (ISU), and restricting foreign direct investment (FDI), which take the following effectiveness order: TI > FDI > ISU. Based on the results of the study, policy suggestions to facilitate pollution reduction and carbon synergies are proposed to help China’s green and low-carbon development.