Environmental regulation and CO2 emissions: Based on strategic interaction of environmental governance

Abstract

In order to reduce carbon emissions and improve environmental governance, the paper discusses the interactive forms of environmental regulation based on the two-regime spatial Durbin model. The effects of environmental regulation and interactive behavior of environmental regulation on carbon dioxide (CO₂) emissions are explored by using the spatial lag of X (SLX) model. It is found that there is a diversified competitive behavior in the enforcement of environmental regulation among local governments in China. And the diversified competitive behavior results in the nearby transfer of pollution, which increases local CO₂ emissions. In addition, there is an inverted "U" curve between environmental regulation and CO₂ emissions, and China is still in the "green paradox" stage. Furthermore, it is found that the environmental regulation mainly affects CO₂ emissions through industrial structure and technological progress. Also, there are differences in the spatial spillover effect of environmental regulation due to the existence of regional heterogeneity, and its impact on CO₂ is particularly significant in the western region. The findings indicate that the central government should strengthen targeted supervision and adaptive incentives for local governments to implement environmental regulation so that joint emission reduction can be promoted.