Study On The Impact Of China’s Environmental Regulation On Green Technology Innovation

In 2022 China released the Implementation Plan for Further Improving the Market-Oriented Green Technology Innovation System(2023-2025),which aims to accelerate the research,development and promotion of advanced energy-saving and emission reduction technologies in order to give full play to the key role of green technologies in supporting green and low-carbon development.Promoting green technology innovation through environmental regulation,the program aims to promote the synergistic development of the economy and environmental protection.China’s economic growth has been widely hailed as a "growth miracle," but in its early years,China put GDP expansion ahead of environmental protection and paid a heavy environmental price for its rapid industrialization in the past.As a result,the rapid economic growth of more than 30 years has been rewarded with huge pressure on the cost of resources and environment,continuous deterioration of ecological environment,and unsustainable development.As the economy continues to develop,it has become imperative to shift economic growth to a model driven by green benefits.In China,transforming growth in an environmentally sustainable manner is critical to ensuring the well-being of the Chinese people.In the long run,R&D funds can be purposefully invested in green technology innovation to promote its development.However,market mechanisms alone cannot alleviate environmental problems.Therefore,environmental regulation has a critical role in addressing environmental market failures and is essential for the development of green innovation.Currently,the Chinese government is actively promoting ecological priority,innovation-driven and green development policies.Environmental regulation and green technology innovation are key to promoting the synergistic development of environmental protection and economy.However,environmental regulation may have both innovation-disincentive and incentive effects.The former is that environmental regulation raises product costs and may crowd out firms’ green technology development inputs.The latter argues that effective environmental regulation will stimulate firms to engage in technological innovation to improve competitiveness.The purpose of this paper is to explore the dual effects of external environmental regulation on innovation incentives and cost increases,and to focus on the impact of environmental regulation on regional green technological progress.With the emergence of the dual dilemma of ecological protection and economic development in China,it has become more and more urgent to find growth drivers.In terms of environmental regulation,government implementation may vary from region to region,resulting in different regulatory policies in different provinces having different impacts on green technology innovation.Therefore,governments need to determine which policies apply to which regions so that they can provide an objective basis for government decisions.This paper aims to answer these questions and explore the effects of environmental regulations on green technology innovation in China in terms of theoretical and empirical analysis.Such an analysis will not only help to gain insight into the link between environmental regulation and green technology innovation,but also provide a reference and basis for formulating targeted policies.The purpose of this paper is to explore the effects of environmental regulation on green technology innovation and to study the bilateral effects in different provinces.On the theoretical side,this paper analyzes the current situation based on the current situation and explores the mechanism of its impact.This provides a theoretical basis to explain the variability of the bilateral impact of green technology innovation under environmental regulations in different provinces.On the empirical side,this paper selects a sample of 29 Chinese provinces from 2011 to 2020 and analyzes the bilateral effects of environmental regulations on innovation disincentives and incentives and their net effects using a bilateral stochastic frontier model.Through this approach,we are able to demonstrate more accurately the existence of a two-way effect of environmental regulations.The findings of this paper are important for us to better understand the relationship between environmental regulation and green technology innovation and provide theoretical support for the formulation of targeted policies.We can find out specific policy directions to promote the development of green technological innovation through the study of green technological innovation under environmental regulation in different provinces,and then promote sustainable economic development and ecological civilization construction.The results of the study show that:(1)environmental regulation has both incentive and inhibitory effects on green technology innovation,and the combined effect of both makes the actual green technology innovation level higher than the frontier innovation level.The innovation incentive of environmental regulation makes the green technology innovation level of each province higher than the optimal level by 36.81%,while the cost inhibitor of environmental regulation makes the green technology innovation level of each province lower than the optimal level by 28.28%,and the combination of both effects leads to the actual green technology innovation level higher than the frontier level by 8.53%.(2)Over time,the incentive effect of environmental regulation on green technology innovation generally increases,while the inhibitory effect on green technology innovation generally decreases,so the overall effect of environmental regulation on green technology innovation shows an enhancing trend.(3)In terms of the regional distribution of environmental regulation on green technology innovation,the net effect of environmental regulation is positive in all four regions,which indicates that environmental regulation has a strong incentive effect on green technology innovation in all four regions.In terms of the effect sizes of different regions,the central region has the strongest incentive effect of environmental regulations,followed by the west,east and northeast.In terms of the net effect,except for the central region,which has a larger net effect,the incentive effect in the east,west and northeast is mostly offset by the inhibitory effect.Based on the above analysis: China should make efforts to improve the construction of relevant supporting infrastructure in the future,adopt differentiated technological innovation policies according to local conditions,and reasonably control the stringency of environmental regulations.