Achieving Carbon Neutrality – The Role of Heterogeneous Environmental Regulations on Urban Green Innovation

Abstract

This article examines the impact of heterogeneous environmental regulations on urban green innovation using panel data from 285 prefecture-level cities in mainland China from 2008 to 2019. From the perspective of green patents, this article utilizes a two-way fixed-effect model and the mediation effect model to examine the mechanism of the impact of heterogeneous environmental regulations on urban green innovation in China. Results show that the urban green innovation development in China is relatively slow and can be easily influenced by national policies. More specifically, the relationship between the command-based environmental regulation and urban green innovation presents an inverted non-linear U-shaped model, whereas the relationship between the market-based and voluntary environmental regulation presents a positive U-shaped model. Further investigation of this mechanism concludes that the progression of regional green innovation is primarily accelerated by technological development, effective energy allocation, and industrial structural upgrading. However, the implementation of relevant environmental regulations varies, resulting in various green innovation progression rates. Therefore, in order to achieve the carbon neutrality goal that China proposes, the effectiveness of environmental regulation implementation should be improved. Moreover, the development of various environmental regulation tools should be better coordinated.

Green credit and enterprise green operation: Based on the perspective of enterprise green transformation

“…Based on the above theory, existing studies have examined the impact of environmental regulations on green transformation from different perspectives. Properly crafted environmental regulatory policies can facilitate the process of technological innovation (Liu et al, 2022), resulting in compensation effects for innovation and fostering green innovation (Tang et al, 2020), which verifies the Porter hypothesis. Green industrial policies can stimulate corporate green innovation through the intermediary role of government subsidies and bank loans, with the promotion effect being more pronounced for state-owned enterprises (Zhu and Tan, 2022).…”

Does digitalization drive corporate green transformation?—Based on evidence from Chinese listed companies

“…In the short term, enterprises implementing digitalization need to increase investment in machine learning, and the employment of highly skilled personnel, etc., which would cost a large number of funds, incur high learning costs (Yu et al, 2017), and derive high management costs (Qi and Cai, 2020). Additional investment and cost would crowd out R&D innovation and environmental protection investment to a certain extent (Liu et al, 2022), exerting bad influence on the renewal of environmental protection equipment and the use of environmental materials, which negatively affects corporate efficiency and green governance. Moreover, acquiring knowledge and technology does not happen overnight and depends to some extent on its absorptive capacity.…”

Research on the effect of green credit on ecological welfare performance: Evidence from China

“…For instance, some studies have found that environmental regulation policies may greatly promote the level of green and high-quality economic development (Chen et al, 2020). Some papers suggest that environmental regulation has a nonlinear influence on green innovation (Liu et al, 2022) and the development of green economy (Shuai and Fan, 2020;Wang, 2020;Ma and Xu, 2022). And some scholars pointed out that the implementation of environmental regulations will bring spatial spillover effects to high-quality economic development in adjacent areas (Feng and Chen, 2018).…”