Regulation and decarbonization：How can environmental regulations more effectively facilitate industrial low-carbon transition

Abstract

Abstract Environmental policies play an important role in the process of industrial low-carbon transition in developing countries, from the perspective of the impact condition and mechanisms, we discuss how to improve its effectiveness, so as to give full play to the positive impact of environmental regulations. Based on the provincial industrial data from 2003 to 2019 in China, this study uses threshold regression model, endogenous regression and intermediary regression model to reveal the impact condition and mechanisms of environmental regulations on industrial low-carbon transition. The results suggest that (1) technological innovation capability and cost bearing capacity are the key condition for environmental regulations to exert a positive impact on low-carbon transition. (2) Environmental regulations have a positive impact on low-carbon transition through technological innovation (technology), resource reallocation (capital) and skill premium (labor). The research on the implementation condition and mechanisms of environmental regulations will help policymakers to formulate appropriate and reasonable environmental regulations and eliminate the obstacles between environmental regulations and low-carbon transition, and the assessment of China's environmental policies will provide reference for environmental governance in other developing countries.