Impact Of Environmental Regulation On Chinese Industrial Energy Efficiency

Chinese early extensive economic development model brought the high growth of industrial economy,but it caused serve environmental pollution and excessive energy consumption.The industrial sector contributing about 40%of GDP accounts for more than 70%of energy consumption and carbon emissions.Improving energy efficiency is an inevitable choice to solve the dilemma between energy shortage and environmental pollution as well as achieve the peak carbon dioxide emissions and carbon neutrality.The 14th Five Year Plan emphasizes promoting green and low-carbon development,controlling pollution from the source and increasing the proportion of non-fossil energy consumption.Environmental regulation becomes the realistic requirement of energy conservation and emission reduction.Under this background,it is of great practical significance to study how environmental regulation affects Chinese industrial energy efficiency.The existing literature focuses on the macro data which ignores the impact of enterprise heterogeneity and lacks of in-depth study on the transmission mechanism.Thus,three transmission mechanisms including cost effect,technological innovation and industrial agglomeration were firstly analyzed from the theoretical perspective.Secondly,the energy and environment data of Chinese industrial enterprises from 2003 to 2011 were used to explore the impact of environmental regulations on energy efficiency as well as the transmission mechanisms.Finally,the heterogeneity was analyzed from three perspectives including resource endowment,pollution intensity and enterprise scale.The results show that:(1)There is a significant imbalance of Chinese industrial energy efficiency.The energy efficiency of western areas is visibly lower than that of eastern areas,and the energy efficiency of high-energy consuming industries is lower than the overall average.(2)Environmental regulation has a positive effect on China’s industrial energy efficiency.(3)Environmental regulation can affect Chinese industrial energy efficiency by increasing the cost of environment pollution end treatment,forcing technological innovation and strengthening industrial agglomeration.(4)The impact of environmental regulation on energy efficiency is heterogeneous.Firstly,Larger scale enterprises are more sensitive to environmental regulation.Secondly,the impact of environmental regulation on energy efficiency of heavy-polluting enterprises is not obvious due to the existence of a certain "Pollution Haven Effect".Finally,there is no notable correlation between environmental regulation and energy efficiency of enterprises in low resource endowment areas,but it can dramatically improve the energy efficiency in high resource endowment areas.Based on the above conclusions,enterprises should attach great attention to technological innovation to promote energy efficiency.Environmental policies should be formulated according to local conditions and different industries.Furthermore,it is necessary to be vigilant against the "Pollution Haven Effect" in the process of policy implementation,and prevent the negative transfer of heavy-polluting enterprises.Government should create a good industrial agglomeration environment to bring positive externalities of industrial agglomeration into full play.