The synergistic impact of incentive and regulatory environmental policies on firms' environmental performance.

The imperative to enhance corporate environmental performance is not only pivotal for a company's growth but also crucial for fulfilling societal responsibilities and protecting global environmental interests. Recognizing the inadequacies of standalone environmental policies, our study delves into the synergistic effects of incentive-based and regulatory approaches on the environmental performance of listed firms in China. We meticulously examine the interplay between environmental punishment and subsidies over the period of 2015-2019. Our analysis reveals that a strategic combination of punishment and subsidies can substantially improve firms' environmental performance. This effect intensifies with the increasing amounts of fines and subsidies. Additionally, we explore the dynamic effects of policy implementation. Our results indicate that subsidies implemented either a year before or after the imposition of punishment might diminish the effectiveness of standalone environmental penalty policies. Furthermore, our findings suggest that diverse regulatory policies enhance firm environmental performance by promoting investments in environmental protection and fostering green innovation. This discovery highlights the need for a nuanced understanding of policy mixes and their implications for corporate environmental strategies.

Impacts of poverty eradication on carbon neutrality in China.

China is facing challenges to tackle the threat of climate change while reducing social inequality. Poverty eradication requires improvement in the living conditions of low-income households, which leads in turn to higher carbon footprints and may undermine the efforts of climate change mitigation. Previous studies have assessed the climate impacts of poverty eradication, but few have quantified how the additional carbon emissions of poverty eradication are shared at the subnational level in China and the impact on China's climate targets. We investigated the recent trend of carbon footprint inequality in China's provinces and estimated the climate burden of different poverty reduction schemes, measured by increased carbon emissions. The results indicate that poverty eradication will not impede the achievement of national climate targets, with an average annual household carbon footprint increase of 0.1%-1.2%. However, the carbon emissions growth in less developed provinces can be 4.0%, five times that in wealthy regions. Less developed regions suffer a greater climate burden because of poverty eradication, which may offset carbon reduction efforts. Therefore, interregional collaboration is needed to coordinate inequality reduction with investments in low-carbon trajectories in all provinces.

Factors Driving China's Carbon Emissions after the COVID-19 Outbreak.

The outbreak of the coronavirus disease 2019 (COVID-19) may exert profound impacts on China's carbon emissions via structural changes. Due to a lack of data, previous studies have focused on quantifying the changes in carbon emissions but have failed to identify structural changes in the determinants of carbon emissions. Here, we use China's latest input-output table and apply structural decomposition analyses to understand the dynamic changes in the determinants of carbon emissions from 2012 to 2020, specifically the impact of COVID-19 on carbon emissions. We find that final demand per capita contributed to emissions growth at a slower pace, but production structure drove a greater carbon emissions increase than before the pandemic. Export-led emissions growth rebounded, and investment-led emissions were more concentrated in the construction sector. The carbon intensity of several heavy industries increased, e.g., the nonmetallic products sector, the metal products sector, and the petroleum, coking, and nuclear fuel sector. In addition, lower production efficiency and increased reliance on carbon-intensive inputs indicated a deterioration in production structure. For policy implications, efforts should be undertaken to increase investment in low-carbon industries and increase the proportion of consumption in GDP to shift investment-led growth to consumption-led growth for an inclusive and green recovery from the pandemic.

The global mismatch between equitable carbon dioxide removal liability and capacity.

Limiting climate change to 1.5°C and achieving net-zero emissions would entail substantial carbon dioxide removal (CDR) from the atmosphere by the mid-century, but how much CDR is needed at country level over time is unclear. The purpose of this paper is to provide a detailed description of when and how much CDR is required at country level in order to achieve 1.5°C and how much CDR countries can carry out domestically. We allocate global CDR pathways among 170 countries according to 6 equity principles and assess these allocations with respect to countries' biophysical and geophysical capacity to deploy CDR. Allocating global CDR to countries based on these principles suggests that CDR will, on average, represent ∼4% of nations' total emissions in 2030, rising to ∼17% in 2040. Moreover, equitable allocations of CDR, in many cases, exceed implied land and carbon storage capacities. We estimate ∼15% of countries (25) would have insufficient land to contribute an equitable share of global CDR, and ∼40% of countries (71) would have insufficient geological storage capacity. Unless more diverse CDR technologies are developed, the mismatch between CDR liabilities and land-based CDR capacities will lead to global demand for six GtCO2 carbon credits from 2020 to 2050. This demonstrates an imperative demand for international carbon trading of CDR.

Incentive or constraint? Comprehensive impacts of green credit policy on industrial energy intensity.

Green credit policy (GCP) has dual attributes of being both an "environmental regulation" and a "financial instrument". Understanding its role in facilitating industrial green transformation is crucial. However, there is limited theoretical and empirical evidence on the impact of GCP on industrial green transformation. This research fills this gap by comprehensively investigating the impacts and mechanisms of GCP on industrial energy intensity (EI) in China, considering both incentive and constraint effects. Theoretically, the environmental and financial impacts of GCP are merged into a unified analytical framework based on a heterogeneous enterprise model. Empirically, diverse empirical methods, including difference-in-differences (DID), difference-in-differences-in-differences (DDD), and mediating effects models, are adopted to examine whether GCP can promote green innovation or accelerate financial constraints. Results show that (1) GCP significantly decreases EI, especially among high-polluting enterprises (HPEs). The impact of incentives is far greater than that of constraints. (2) Regarding the incentive effect, energy substitution and innovation offsets exert a primary influence on reducing EI. (3) The constraint effect is caused primarily by rising financing and pollution abatement costs. (4) Heterogeneity analysis shows that the inhibiting effect of GCP is more significant in non-state-owned enterprises, underdeveloped financial markets, and abundant energy endowments. This paper provides a theoretical framework and new empirical evidence for policymakers to design effective policies for promoting industrial green transformation.

Health effects of future dioxins emission mitigation from Chinese municipal solid waste incinerators.

Dioxins (including 2,3,7,8-tetrachlorodibenzo-p-dioxin, as Group 1 Carcinogen) in the atmosphere mainly originate from incomplete combustion during municipal solid waste (MSW) incineration. To significantly reduce dioxins emission from the MSW incineration industry, China has promulgated a set of ambitious plans regulating MSW-related pollution; however, the emission reduction potentials and concomitant environmental and health impacts associated with the implementation of these programs on a national scale remain unknown. Here, we use real measurements from official environmental impact assessment systems and continuous emissions monitoring systems (covering 96.6% of national MSW incinerators) to estimate unit-level dioxins emission and concomitant environmental and health impacts. We find that in 2018, 99.3% and 66.7% of Chinese incinerators met such concentration and temperature standards, respectively, controlling the total emissions to 19.6 g toxic equivalency quantity and maintaining carcinogenic and noncarcinogenic risks significantly below safety levels nationwide. Fully achieving both current standards and future regulations will reduce emissions and health risks by 67.7% and 62.6%, respectively, with waste sorting program contributing the majority. This study reveals substantial benefits from curbing MSW-related dioxins pollution and underscores the promise of ongoing management.

Mismatched Social Welfare Allocation and PM2.5-Related Health Damage along Value Chains within China.

Value chains have played a critical part in the growth. However, the fairness of the social welfare allocation along the value chain is largely underinvestigated, especially when considering the harmful environmental and health effects associated with the production processes. We used fine-scale profiling to analyze the social welfare allocation along China's domestic value chain within the context of environmental and health effects and investigated the underlying mechanisms. Our results suggested that the top 10% regions in the value chain obtained 2.9 times more social income and 2.1 times more job opportunities than the average, with much lower health damage. Further inspection showed a significant contribution of the "siphon effect"─major resource providers suffer the most in terms of localized health damage along with insufficient social welfare for compensation. We found that inter-region atmosphere transport results in redistribution for 53% health damages, which decreases the welfare-damage mismatch at "suffering" regions but also causes serious health damage to more than half of regions and populations in total. Specifically, around 10% of regions have lower social welfare and also experienced a significant increase in health damage caused by atmospheric transport. These results highlighted the necessity of a value chain-oriented, quantitative compensation-driven policy.

The narrowing gap in developed and developing country emission intensities reduces global trade's carbon leakage.

International trade affects CO2 emissions by redistributing production activities to places where the emission intensities are different from the place of consumption. This study focuses on the net emission change as the result of the narrowing gap in emission intensities between the exporter and importer. Here we show that the relocation of production activities from the global North (developed countries) to the global South (developing countries) in the early 2000s leads to an increase in global emissions due to the higher emission intensities in China and India. The related net emissions are about one-third of the total emissions embodied in the South-North trade. However, the narrowing emission intensities between South-North and the changing trade patterns results in declining net emissions in trade in the past decade. The convergence of emission intensities in the global South alleviates concerns that increasing South-South trade would lead to increased carbon leakage and carbon emissions. The mitigation opportunity to green the supply chain lies in sectors such as electricity, mineral products and chemical products, but calls for a universal assessment of emission intensities and concerted effort.