Assessing the influence of environmental regulation on carbon sequestration in China: Towards a sustainable future.

Carbon sequestration is vital to maintaining carbon neutrality and mitigating climate change's impact on humans and the environment. As the government's role in eco-advocacy is primarily designed to safeguard the environment, this paper discusses the impact of government environmental regulations on carbon sequestration. By analyzing 286 cities from 2000 to 2019 in China, we propose that government environmental regulation can lead to a 0.77% increase in carbon sequestration. Additionally, industrial agglomeration and industrial structure advancement are regarded as viable channels. As a result of the differences in city types, government intervention, and public concern across different cities, the impact is likely to vary as well.

Unintended environmental gains: How can a favorable business environment promote the low-carbon transition?

Given the increasing threat of economic downturns and global warming, the governments of developing countries urgently need effective measures that can both stimulate economic development and promote low-carbon transitions. As a widely accepted method for stimulating economic growth, the improvement of the business environment and its effect on economic activity have been fully discussed. However, little is known about whether and how the business environment affects the low-carbon transition. By leveraging city-level data from China, this paper exploits whether and through which channels a favorable business environment promotes a low-carbon transition. We find that improving the business environment has a positive impact on carbon efficiency. This relationship is verified to be robust through various alternative tests. Additionally, it is demonstrated that enhancing the business environment can increase carbon efficiency by promoting green technology progress and stimulating new firm entry. Heterogeneity analysis indicates that the positive effect of the business environment is pronounced for cities with intensive environmental regulation, sufficient environmentally targeted fiscal expenditure, and loose economic growth requirements. This paper reveals the unintentional environmental gains of business environment optimization and provides important insights into the low-carbon transition for developing economies.

How would the carbon tax on energy commodities affect consumer welfare? Evidence from China's household energy consumption system.

Although carbon tax policies can effectively restrain energy consumption and reduce pollution, they will also affect the welfare of residents through a price mechanism. We explore the impact of energy price increases that are caused by possible carbon tax policies on the welfare of residents in China with a quadratic almost ideal demand system (QUAIDS) model. The estimated elasticities show that the income elasticity of coal demand is -0.741 for urban residents, compared to 0.392 for rural residents. The cross-price elasticity shows that China's residential energy consumption has moved up the clean energy ladder. Based on the above reliable elasticity estimates, the welfare effects are analyzed in the residential consumption system. The overall welfare loss for residents increases with the level of carbon tax. A carbon tax on all energy sources is a regressive policy for China, and when the carbon tax rate reaches the world average, of 30 USD/tCO2e, the welfare loss for low-income and high-income residents is 1.55% and 0.62% respectively. However, the separate imposition of carbon taxes on different energy sources shows the heterogeneity of the welfare impacts of carbon taxes. At the national and urban levels, the distribution effects of carbon taxes are regressive for coal, LPG, and electricity, progressive for gasoline, and distributional neutral for natural gas. In rural areas, however, the welfare distribution effect of the carbon tax on diesel, LPG, and natural gas are progressive, and the welfare effects of carbon taxes on electricity show an inverted U-shaped distribution. Our findings are conducive to the development of a differentiated carbon tax policy by the Chinese government.