Has heterogeneous environmental regulation promoted a cleaner transition in China's energy consumption structure?

Abstract

At present, the world energy resources map is undergoing profound changes. Global energy technology is brewing a profound change, and all countries are committed to the transition to green and low-carbon energy. This paper refers to the study of Acemoglu (2012) and discusses the impact of heterogeneous environmental regulations on the energy consumption structure at the theoretical level by building a two-sector model that includes both clean energy and traditional energy outputs. Then, based on China's provincial panel data from 2007 to 2020, we examine the impact of heterogeneous environmental regulations on the structure of energy consumption using fixed effects and double difference methods. It is found that the double substitution and decarbonisation effects of command-and-control environmental regulations on energy are not significant due to the influence of regional resource endowment and the level of regional economic development. However, market-incentivised environmental regulation significantly reduces the proportion of coal consumption, strengthens the substitution effect of clean energy for nonclean energy, and significantly improves the decarbonisation index of the energy consumption structure. This paper provides more theoretical support and empirical evidence for the government to use heterogeneous environmental regulations to promote energy consumption structure transformation.