Evaluating the effect of the accountability audit of natural resources on carbon emissions reduction in China

Abstract

The accountability audit of natural resources (AANR) is a major institutional arrangement for advancing the construction of an ecological civilization in China. Based on the panel data of 271 cities in China from 2005 to 2017, this paper investigates the relationship between the AANR and carbon dioxide (CO2) emissions using a multi-period difference-in-differences (DID) model. The results show that AANR significantly increases the CO2 emission reduction rate by 0.009 units at the 5% significance level. The results still hold after a series of robustness tests. Given all else being equal, this significant effect is 0.001. Further analyses show that AANR improves pilot cities’ CO2 emission reduction rates mainly by enhancing their green innovation capability. The mediating effect of cities’ green technology innovation capability accounts for 96.00%, while the AANR’s direct effect only accounts for 4.00%. The AANR has significantly positive effects of 0.017% and 0.029% for western cities and cities with high fiscal pressure at the 5% and 1% significance levels, respectively. Therefore, strengthening AANR implementation by enhancing the mediating efficiency of cities’ green technology innovations and implementing dynamically differentiated AANR policies in Chinese meso-cities will contribute to the achievement of China’s carbon peaking and carbon neutrality targets.