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Environmental decentralization is an institutional factor that influences the effect of ecological environment governance. Based on panel data of provinces in China from 2008 to 2015, this paper evaluates the indicators of environmental decentralization, and uses a fixed-effect model and a threshold model to test the influence of environmental decentralization and environmental regulation on environmental pollution. The results indicate that China's environmental decentralization can significantly curb environmental pollution in general. There is a U-shaped relationship between environmental decentralization and environmental pollution. Reasonable environmental decentralization can restrain environmental pollution, while excessive environmental decentralization aggravates environmental pollution. There is an inverted U-shaped relationship between environmental regulation and environmental pollution. If the intensity of environmental regulation is too low, it cannot inhibit environmental pollution, while if the intensity of environmental regulation is increased to a certain level, it can help to inhibit environmental pollution. The joint impact of environmental decentralization and environmental regulation cannot reduce environmental pollution. That is, with the enlargement of environmental decentralization, environmental regulation fails to reduce environmental pollution. The effect of environmental decentralization has significant regional heterogeneity in economic development level and emission intensity. The above conclusions have important reference value for optimizing the environmental decentralization system and formulating scientific environmental decentralization policies. [ABSTRACT FROM AUTHOR]

The time-varying dynamics of the transition to renewable energy reflect the effectiveness and efficiency of energy policy. This paper investigates renewable energy transition behavior in China using Markov regime-switching models. Two distinct phases, expansion and contraction, are identified based on the growth rates of renewable energy consumption share. We find that since China started its new-energy national strategy in 2005, there has been an extended period in which it has been in the expansion state, although it occasionally reverts to a contraction state. Intriguingly, we uncover that the timing of transition state changes can be explained by the changes in policy-related, market-based instruments and risk-related indexes. These findings present implications for policymakers in developing more precise and effective policies, that drives investment choices to align with the goal of a sustainable energy system. [Display omitted] [ABSTRACT FROM AUTHOR]

Green innovation (GI) is increasingly recognised as an effective strategy for tackling climate change, mitigating environmental issues, and promoting sustainable development. Using panel data of the Chinese listed firms from 2007 to 2019, this study adopts the difference-in-differences approach to assess the impact of the green finance policy (GFP) initiated by the Chinese government in 2012 on the green innovation performance of firms. The findings reveal that the GFP significantly boosts the green innovation performance of heavily polluting enterprises (HPEs). Notably, this effect is more pronounced in state-owned enterprises and firms with high dependence on external finance. Compared with penalty-based regulations, incentive-based and voluntary environmental regulations demonstrate more significant moderating effects on the relationship between the GFP and green innovation performance for HPEs. We also identify improved efficiency in the usage of green investments as a potential mechanism through which the GFP enhances the green innovation performance of HPEs. Further comparative analysis shows that green enterprises can achieve simultaneous improvement in both the quality and quantity of green innovation, whereas HPEs predominantly exhibit enhancements in innovation quantity. To maximise the GFP's positive effects, it is recommended to facilitate more targeted bank lending towards HPEs to support their structural transformation. Additionally, the coordinated deployment of diverse environmental policy instruments is advised to exploit their synergistic effects. • This paper confirms the positive relationship between Green Finance Policy (GFP) and the green innovation. • We develop a novel machine learning approach to enhance the accuracy of variable measurements. • Firms with different ownership structure and external finance reliance are impacted differently by the GFP. • Both incentive-based and voluntary environmental regulations have positive moderation effects. • GFP can improve the green innovation by enhancing the green investment efficiency. [ABSTRACT FROM AUTHOR]

One of the key puzzles of authoritarian environmentalism is its dubious effectiveness due to fragmented interests among different political and market actors, which are often found undermining centrally crafted environmental regulations and targets. China recently launched a series of institutional reforms to fix its notorious local implementation gaps on environmental policies. By setting up a stringent central inspection system and holding frequent inquiry meetings with local government leaders, Beijing aims to reconfigure central–local power relations on environmental governance. We argue that these institutional reforms are essentially transforming environmental governance in China into a highly politicized task by enforcing party disciplines rather than legal frameworks. The aim is to rein environmental officers and hold local political leaders accountable. These reforms may significantly reduce local protectionism, yet such highly politicized approach based on coercive party rules and disciplines bears the risk of weakening the role of legal enforcement and can breed discontent among local officers. Consequently, how these new reforms can achieve a desirable central–local relation for addressing China's environmental crisis in the long run is far from certain. [ABSTRACT FROM AUTHOR]

Haze pollution caused by particulate matter such as PM2.5 and PM10 significantly affects public health. Confronted with haze pollution, people have increasingly taken to expressing opinions online to demand restrictions on pollution discharge by enterprises to protect their health rights. However, are such public demands met by the government and incorporated into policy agenda relating to environmental regulation policies? To investigate this question, this study employed text content analysis to examine the role of public opinion as an intermediary in the relationship between haze pollution and the formulation of environmental regulation policies, using a dataset of 460 environmental regulation policy documents and over 800,000 public opinions on environmental issues spanning from January 2011 to December 2021. We found that public opinion exerted a significant intermediary effect by linking haze pollution and environmental regulation policy tools. Further analysis revealed heterogeneity in the influence of public opinion on environmental regulation policy tools. Public opinion exhibited the most substantial intermediary effect on command-control policy tools (with a 6.68% intermediary effect), followed by economic incentive policy tools (4.65%) and social autonomy policy tools (4.58%). Additionally, there was a notable time lag in the impact of public opinion on environmental regulation policy tools. It took approximately 7–10 months for the government to respond to the disseminated public opinions. This study may shed light on how the government can encourage public engagement, respond to, and guide public opinion. [Display omitted] • Public opinion plays an intermediary role between haze and regulatory policy. • 7–10 months' time lag of environmental policy to public opinion was estimated. • The heterogeneity in the impact of public opinion on three policy tools was analyzed. [ABSTRACT FROM AUTHOR]

In this paper, it is found that environmental regulation is an important mechanism that trade openness affects the level of human capital. The author established a theoretical framework to analyze the influence of trade openness on the level of human capital and adopted the system GMM to test it, using Chinese provincial data over the period 1995–2015. The empirical results show that environmental regulation has a long-term U-shaped effect on the level of human capital, while the current environmental regulation in China is conducive to improving the level of human capital. Furthermore, the promotion of human capital level can also increase the possibility of improving environmental regulation, which is conducive to the internal formation and positive interaction between human capital and environmental regulation. The research further enriches the theory of sustainable development of environment and economy. It provides theoretical support for China and developing countries with similar economic and technological levels to actively implement more stringent environmental policies in the context of trade openness. Image 108550 [ABSTRACT FROM AUTHOR]

Abstract Most existing studies on environmental regulations and the location dynamics of pollution-intensive industries regard new environmental procedures as an incremental development process, and neglect the influence of sudden changes in environmental regulations triggered by a pollution crisis. Using the drinking water crisis in the Taihu Lake Watershed (TLW) in 2007 as an example, this paper examines the spatial behavior of pollution-intensive firms across the TLW, and pays special attention to the regional differences in the effectiveness of enforcing environmental regulations. We find that the pollution haven hypothesis works efficiently in the short term after an unexpected pollution crisis because of the immediate strengthening of environmental regulations by local governments under pressure from the central government and the public. However, the effect of strict environmental policies was compromised by differences in the effectiveness of policy enforcement across the watershed. Specifically, when other regions (for example, Huzhou) were compared with Wuxi (the site of the crisis in the present study), these regions were found to be relatively insensitive to the effects of the pollution incidents and the environmental regulations that were triggered. Highlights • This paper examines spatial behaviors of pollution-intensive firms across the Taihu Lake watershed in response to the water crisis. • The paper pays special attention to the regional difference in enforcement effectiveness of environmental regulations. • Pollution haven hypothesis works efficiently in the short run. • The effect of stringent environmental policies was compromised by differences in policy enforcement effectiveness. [ABSTRACT FROM AUTHOR]

Central transfer payment for the key ecosystem zones has become the most funded payments for ecosystem services program in China. The ecological fiscal transfer (EFT) aims to improve the eco-environmental quality of the targeted counties by providing supplementary fiscal funds, though not strictly specifying the usage. This study employs a time-varying difference-in-difference strategy to investigate the impact of EFT on environmental outcome by using a comprehensive county-level dataset covering 1949 counties from 2004 to 2015. Estimates show that the policy had a positive impact on local air quality, whereas the dynamic effect is diminishing. The policy effect is achieved through more stringent environmental regulation and stricter industrial access. Reduction of industrial dust emission is more noticeable than that of sulfur dioxide. There is an economic scale effect that the scale of a county can increase effectiveness of EFT on air quality improvement, whereas an opposite development stage effect will undermine its effectiveness. Heterogeneities were detected concerning transfer intensity, intervention period, geographical region, and ecosystem type. These findings facilitate a deep understanding how EFT could play a significant role in protecting local environment in large developing countries. Several policy implications are drawn to enhance the effectiveness of the largest EFT program. • Ecological fiscal transfer is an emerging instrument in combating eco-environmental degradation. • China's ecological fiscal transfer (EFT) is taken as a quasi-experiment to evaluate its effectiveness. • A time-varying DID technique is employed by using unique county-level datasets. • China's EFT is effective in improving local air quality with a diminishing dynamic effect. • Various heterogeneities of effect were detected and impact mechanisms were identified. [ABSTRACT FROM AUTHOR]

The increasing demand for electricity worldwide has caused a corresponding rise in the consumption of coal, leading to an increase in sulfur dioxide (SO 2) pollution levels. Despite the severity of the issue, there is a lack of conclusive evidence establishing a causal link between SO 2 pollution and health, particularly in developing countries. We leverage a large national environmental regulation policy, implemented in China to reduce SO 2 emissions, to estimate the impacts of SO 2 pollution on mortality. We find that 1- μ g / m 3 reduction in SO 2 concentrations leads to 18 fewer cardiovascular deaths per 100,000 people aged 60 years and above (0.9% decrease) and 2 fewer deaths per 100,000 children under the age of 5 (1.5% decrease) annually. A back-of-the-envelope calculation suggests that the total health benefits of the environmental policy outweigh its economic costs. The results are consistent across various robustness checks. [ABSTRACT FROM AUTHOR]

Combining time variations, cross-province variations in policy intensity, and variations in pollution intensity across industries, we estimate the impact of environmental regulation on firm exports. We find that in more pollution-intensive industries, stricter environmental regulation reduces both the probability that a firm will export and the volume of exports. Heterogeneous tests show that the impact is smaller for SOE firms and for firms located in the central and western part of China. We also find that the reduced probability that a firm will export is driven by a decline in non-exporters entering the export market. [ABSTRACT FROM AUTHOR]

Some developed countries have enacted extended producer responsibility regulations that facilitate the diffusion of environmental supply chain cooperation (ESCC) practices among manufacturers. Developing countries, such as China, have adopted similar but generally flexible and voluntary regulations and policies. Using exchange theory with a focus on regulatory aspects as the theoretical lens, this paper develops propositions to examine if awareness of voluntary environmental regulatory policies is different among manufacturers as well as the relationship to ESCC practices adoption. Results from cluster analysis and multivariate analysis of variance for 308 responses identify three categories of Chinese manufacturers with respect to their awareness of environmental regulatory policies. These three categories include savvy, attentive, and nescient manufacturers. It was found that manufacturers characterized with higher environmental regulatory awareness tend to implement ESCC practices more intensively. Hierarchical regression analysis was further used to examine the relationship between awareness of regulatory policies and ESCC practices. Awareness of domestic regulatory policies has positive effects on green purchasing only for savvy manufacturers. Regression results show a nonlinear relationship between awareness of domestic regulatory policies and customer cooperation with environmental concerns, from slightly positive for nescient manufacturers and slightly negative for attentive manufacturers to significantly positive for savvy manufacturers. [ABSTRACT FROM AUTHOR]

China has experimented with a wide range of policies to encourage firms to improve their environmental performance, often with mixed results. This paper investigates the effectiveness of combining two different policies at the same time: (1) a more centralised environmental inspection process and (2) new rules on the public disclosure of policy compliance for firms wanting to undertake an initial public offering (IPO). A theoretical framework predicts that a more centralised inspection and public disclosure should improve both a firm's environmental performance and profitability. The results of instrumental variable estimations for 536 listed Chinese firms for the period 2009 to 2019 confirm the theoretical predictions although the positive effect on profitability only lasts for two years after compliance with the IPO requirements. An investigation into possible mechanisms shows that the joint policy promotes investment in green projects while also increasing demand for the firm's products. The findings highlight greater regulatory complexity may be needed if a country wishes to change the behaviour of firms in a manner that is consistent with overcoming environmental challenges. [ABSTRACT FROM AUTHOR]

Recent literature on environmental governance in China frequently ascribes blame for China's environmental problems to sub-national governments' lax environmental enforcement. Such research implicitly assumes that more central control would lead to better results but, as yet, the role of the centre in environmental governance remains underresearched. In the context of the current phase of recentralization, this article studies central and local interests, capacities and interactions across policy issues and government agencies. By “bringing the centre back” into the study of central–local relations in China, we examine both where such recentralization has in fact occurred and whether such recentralization efforts have improved environmental outcomes. We argue that centralization does not improve outcomes in every case. Further, central and local levels of governance are not as different as they might seem. Indeed, there are significant areas of overlapping interests and similar patterns of behaviour, both positive (enforcement) and negative (shirking), between central and local administrations. The results draw an empirically and theoretically rich picture of central–local relations that highlights the innate complexity of China's environmental governance patterns during the current phase of recentralization. [ABSTRACT FROM PUBLISHER]

Theoretical studies of pollution haven hypothesis predict that differentiated environmental regulation policies will result in inter-country relocation of polluting industries. This paper investigates pollution haven hypothesis at domestic level in China. Using panel data of 30 provincial level regions for the period 2004 to 2013, this paper empirically examines to what extent multiple environmental policies affect intra-country relocation of polluting industries in China. It is found that the implementation of both economic policy instrument like pollution discharge fee and public participation like letter complaints on environmental problems encourages industrial relocation, whereas the implementation of environmental legal policy instrument like laws, regulations and rules prevents polluting industries from relocating to other regions. It is also found that the relocation effect of environmental policies varies with industrial characteristics. Compared with water pollution-intensive industry, air pollution-intensive industry dominated by stated-owned capitals are insensitive to legal policy instruments. These findings suggest that the validity of pollution haven hypothesis is jointly associated with the type of environmental policy as well as industrial characteristics. [ABSTRACT FROM AUTHOR]

• Environmental regulations can improve energy-environment efficiency of firms. • Environmental policies have asymmetric impact on heterogeneous firms. • End treatment and source control are important channels for improving efficiency. • Impact of different policy tools on energy-environment efficiency is heterogeneous. • Micro evidence for evaluating the effect of environmental regulation is provided. Energy-environment efficiency can be used as a means of control to change the mode of economic development by considering the pollution reduction factor. Taking China as an example, this study uses a nonradial superefficiency data envelopment analysis method to measure microlevel energy-environment efficiency and investigates the relationship between environmental regulation and efficiency. The findings show that for every 1% increase in environmental regulation, firms' energy-environment efficiency increases by approximately 0.04% and that environmental regulations have a greater impact on pollution-intensive firms and private firms compared to other types of firms. A median effect model shows that end treatment and source control are important channels through which environmental regulation can improve firms' energy-environment efficiency. In addition, the influence of different environmental regulation policy tools on firm energy-environment efficiency is heterogeneous. With every 1% increase in a command-and-control and market-based incentive policy, energy-environment efficiency increases by 0.01–0.02%, while the effect of public participation policy tools is not significant. This study provides not only new micro empirical evidence for evaluating the effect of environmental regulation but also a reference for applying and coordinating different types of environmental policy tools. [ABSTRACT FROM AUTHOR]

We study environmental regulation and its role for trade in China. Specifically, we assess the effectiveness of an environmental policy in China that introduced stricter regulations on sulfur dioxide (SO 2 ) emissions in targeted cities. To identify the causal effect of this policy on exports, we use sectoral export data for a panel of Chinese cities and exploit variations in exports between cities and sectors, over time, and, in a second step, between firm types. We find a relative fall in sectoral exports in targeted cities after the implementation of the policy, which is sharper the more polluting the industry. Further, we find that the observed effect is mainly driven by privately owned firms, whereas exports of state-owned firms seem to be unaffected by the new policy. This finding is consistent with the preferential political treatment of state-owned firms in China. [ABSTRACT FROM AUTHOR]

Rare earth elements (REE) captured a startled world's attention during the 2010 Diaoyu/Senkaku Islands crisis, when it appeared that China withheld access to them during its border dispute with Japan. China asserts that its sovereign right to environmental regulation and national production quotas is unassailable. However, China's trade measures appear to be inconsistent with WTO rules, as well as with environmental protection and conservation, since they incentivize illegal mining and smuggling practices. In an upcoming case (DS431), the United States, the European Union, Japan and 16 third parties will argue before the WTO that China's trade measures on rare earths, tungsten and molybdenum constitute discriminatory behaviour and are illegal. This raises the question of whether China is inappropriately using the environment as a defence against allegations that its rare earth trade policies are in violation of its WTO obligations. [ABSTRACT FROM PUBLISHER]

Environmental risk assessment is an essential step in the development of solutions for pollution problems and new environmental regulations. An assessment system for environmental risks has been developed in China in recent decades. However, many of the Chinese technical guidelines, standards, and regulations were directly adapted from those of developed countries, and were not based on the Chinese environmental and socioeconomic context. Although existing environmental regulations for pollutants are usually obtained by extrapolations from high-dose toxicological data to low-dose scenarios using linear-non-threshold (LNT) models, toxicologists have argued that J-shaped or inverse J-shaped curves may dominate the dose-response relationships for environmental pollutants at low doses because low exposures stimulate biological protective mechanisms that are ineffective at higher doses. The costs of regulations based on LNT and J-shaped models could therefore be dramatically different. Since economic factors strongly affect the decision-making process, particularly for developing countries, it is time to strengthen basic research to provide more scientific support for Chinese environmental regulations. In this paper, we summarize current Chinese environmental policies and standards and the application of environmental risk assessment in China, and recommend a more scientific approach to the development of Chinese regulations. [ABSTRACT FROM AUTHOR]

Environmental problems are threatening China's sustainable future. China began the implementation of several environmental policies in the late 1970s and the stringency of these regulations is increasing. We utilize province-level data over the period 1987–2001 to measure various components of productivity within a joint production model that considers both market and environmental outputs. We estimate both Malmquist and Luenberger productivity indices and find that environmental management in China is deteriorating, while the productivity level of joint production is relatively constant. [ABSTRACT FROM AUTHOR]

Chinese government adopted a new environmental program during "Eleventh Five-Year Plan" period. Whether this program can achieve its goal of pollution reduction and quality improvement for exports is of vital importance for China's sustainable development. This paper constructs a quasi-difference-in-difference (DID) framework to identify the effects of the new environmental policy on export product quality by using highly disaggregated trade transaction data at the product level. Empirical results show that the implementation of pollution reduction targets is negatively correlated with export product quality. This negative impact is more profound in western regions, capital-intensive industries, privately owned firms and firms exporting to countries which are not members of Organization for Economic Co-operation and Development group. In addition, our extended analysis shows that the negative effects can be mitigated through product switching within the firms. The major policy implication is that local governments should take proper measures to strengthen the effects of innovation offsets caused by environmental regulation and effectively utilize the induced effects of environmental regulation on product switching. The goal is to achieve a win-win outcome for environmental protection and improvement in export product quality. • Pollution reduction enforcement significantly reduces export product quality. • Innovation can be an offsetting force for this negative impact. • The negative effects can be mitigated through product switching within the firms. • There are variations across regions, sectors and ownership. • Environmental regulation should accommodate these differences. [ABSTRACT FROM AUTHOR]

Using firm establishment-level data combined with provincial socio-economic characteristic panel data in China for the period of 2011–2015, this study seeks to empirically examine the impact of environmental regulation on location choices of polluting firms. The results of the conditional logit model provide compelling evidence that environmental regulations do affect the location choice of firms in polluting industries. Instead of supporting the pollution haven effect, our results consistently confirm the Porter effect at the country level. This result is robust when taking endogeneity problem into account, adopting various model specifications and estimation strategies, using alternative measurements of environmental regulation and location choices, and subsampling excluding international political events. However, the results also show divergent effect of environmental regulation on location choices for heterogeneous firms. Specifically, polluting firms in eastern region prefer to invest in provinces with stringent environmental policies but those in other regions, especially in northeastern region, choose to locate in provinces with lax environmental regulation. While water-dependent polluting firms with a low level of footlooseness are more likely to enter locations with loose environmental regulation, air pollution-intensive firms tend to locate in provinces with tight environmental legislation. These results have policy implications for transitional China as well as other developing countries with similar experience. Image 1 • We study the impact of environmental regulation on polluting firms' location choices. • We employ conditional logit model to analyze the firm establishment-level data. • Our results consistently confirm Porter effect rather than pollution haven effect. • The result is robust to consider endogeneity problem and to various robustness tests. • Divergence effect of environmental regulation for heterogeneous firms is also discovered. [ABSTRACT FROM AUTHOR]