Exploring the Role of Environmental Regulation and Fiscal Decentralization in Regional Energy Efficiency in the Context of Global Climate

Abstract

As an important factor of production, the use of energy will greatly improve production efficiency and is the material basis for China’s sustainable development. Environmental regulation plays an important role in energy efficiency (EE), while fiscal decentralization is an important institutional context for China’s economic development. In order to explore the role of environmental regulation and fiscal decentralization on EE, this paper measures the EE of 30 provincial regions in China from 2006 to 2020 by the super-efficient SBM method, and verifies the relationship between fiscal decentralization and environmental regulation on EE using a spatial econometric model, and conclusions as follows: (1) China’s overall energy efficiency averages 0.563, still at a low level, with the highest average efficiency value in the east and the lowest in the west. (2) An inverted U-shaped relationship exists between environmental regulation and EE, and its spatial spillover effect also shows an inverted U-shaped relationship. Fiscal decentralization promotes the regional EE, and its spatial effect also significantly positive. (3) When the level of environmental regulation increases, the EE level of the local and neighboring provinces will increase. The enhancement of fiscal decentralization system can promote local EE, but it has a negative effect on the energy efficiency level of neighboring provinces. Finally, based on the results of the empirical analysis, this paper proposes suggestions for improving regional EE, which are of great theoretical and practical value for improving climate change and achieving sustainable regional economic development in China.

Modeling the Impact of Fiscal Decentralization on Energy Poverty: Do Energy Efficiency and Technological Innovation Matter?

“…Obviously, the results of this paper support the latter. Moderate fiscal decentralization will improve energy efficiency [24], promote the development of renewable energy [21,48], and also have spatial spillover effect [49]. This shows that fiscal decentralization will improve the positive attitude of local governments to solve energy problems.…”

Environmental regulation, industrial structure and energy efficiency: Evidence from 30 provinces in China

“…Moreover, with further research, several scholars have found that the relationship between environmental regulation and energy efficiency cannot be simply explained by a linear relationship and that there may be a nonlinear relationship between them. Wu and Wang [ 18 ] calculated the energy efficiency of 30 provinces in China by using the SBM method and found that there was an inverted U-shaped relationship between environmental regulation and energy efficiency. In addition, Chu and Wang [ 19 ], by dividing environmental regulation into command-and-control and market incentive types, found that the impact of command-and-control environmental regulation on energy efficiency exhibited an inverted U shape, while that of market incentive environmental regulation exhibited a U shape.…”