Energy- and Environment-Biased Technological Progress Induced by Different Types of Environmental Regulations in China

Abstract

With the increasing pressure of energy exhaustion and environmental degradation, environmental regulation is considered as a strategy to achieve sustainable development. This paper specifically analyzes the mechanism of multi-dimensional environmental regulations on energy- and environment-biased technological progress, and empirically detects the differentiated impacts using China’s panel data from the period 2000–2016, employing the generalized method of moments (GMM) and a dynamic threshold model. The results reveal that: (1) command-and-control regulation (CCR) promotes energy-saving and pollution abatement technological progress. Market-based regulation (MBR) stimulates energy-saving technological progress, while informal regulation (IR) only accelerates environment conservation technological progress. (2) There are threshold effects on the relationship of environmental regulations and biased technological progress. With economic developments, CCR and MBR have positive effects on energy- and environment-related technological progress, whilst IR fails to promote backstop and pollution abatement technological progress. The clear diversity in the impacts of different environment regulations on biased technological progress provides new insights for the optimal future policy design.