Improvement of Eco-Efficiency in China: A Comparison of Mandatory and Hybrid Environmental Policy Instruments

Abstract

China’s environmental problems have long been criticized. The Communist Party of China (CPC) and the government have increasingly paid attention to developing environmental protection and included the construction of an ecological civilization in the “Five-in-One” development strategy. The improvement of regional eco-efficiency is an important way to realize the coordinated development of the entire society, and environmental policy instruments are a powerful means to enhance regional eco-efficiency. This paper categorizes environmental policy instruments into mandatory, hybrid, and voluntary types. Based on panel data from 31 provinces in China from 2005 to 2015, the paper discusses the impact of environmental policy instruments on regional eco-efficiency and the means of the impact. The research shows that (1) mandatory and hybrid environmental policy instruments play a significant role in promoting regional eco-efficiency, while the role of voluntary instruments is not significant in promoting regional eco-efficiency; (2) hybrid and mandatory environmental policy instruments have negative interactions; and (3) the level of economic development will positively affect the role of hybrid environmental policy instruments in promoting regional eco-efficiency but negatively affect the role of mandatory instruments in promoting regional efficiency.