Influences of Environmental Regulations on Industrial Green Technology Innovation Efficiency in China

Abstract

The Paris Agreement marks global response to climate change after 2020 and China has proposed the dual carbon goals, carbon peaking and carbon neutrality, in response. This paper analyses the contribution to dual carbon goals by analyzing the impact of environmental regulations (ERs) on green technology innovation (GTI) in China. First, considering variances in energy consumption structure across provinces and industries, industrial CO2 emission is calculated and set as an undesirable output of industrial GTI. Then, industrial green technology innovation efficiencies (GTIE) of 29 provinces in China between 2005–2017 are calculated using a non-oriented two-stage network SBM-DEA model assuming variable returns to scale. Last, dynamic evolution and regional differences of industrial GTIE during green technology R&D, green technology commercialization, and overall GTI stages are respectively observed, and the influences from different types of ERs, command-based (CER), market-based (MER), and voluntary (VER), on industrial GTIE are analyzed. We identify China is overall experiencing relatively low but gradually increasing industrial GTIE and Industrial GTIE present gradient changes across provinces with increasingly prominent regional difference. It is found that influences of types of ERs on industrial GTIE present dynamic effect, threshold effect, lag effect and regional differences.