Environmental regulation and energy investment structure: Empirical evidence from China's power industry

Li Xie, Zexin Li, Xiuhua Ye and Yanru Jiang

Technological Forecasting and Social Change, 2021, vol. 167, issue C

Abstract: Investment structure optimization is important for achieving green development, and environmental regulation affects enterprises’ investment behavior significantly. This study divides environmental regulation into market-based and command-and-control policies. The latter is further divided into the formulation and implementation of policies. Using the Chinese power generation industry from 2007 to 2017 as a sample, we employ the system generalized method of moments (system GMM) to study the impact of environmental regulation on the energy investment structure and explore how differences in regions and environmental regulations affect the energy investment structure. The results show that although environmental regulation increased the proportion of investment in new energy power generation, different types and levels of environmental regulations affected investment in power generation differently. Stricter command-and-control environmental regulation policies at the formulation level increased the investment proportion of new energy power generation. However, the regional data show that different types and levels of environmental regulation affected the power generation investment structure in each region differently. Both command-and-control and market-based environmental regulation in China's central and western regions failed to play their role. Moreover, the implementation of command-and-control environmental regulation policies significantly influenced the direct increase in the proportion of new energy power generation in China's eastern region.

Keywords: Power generation; Investment structure; System generalized method of moments; Command-and-control environmental regulation; Market-based environmental regulation (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:167:y:2021:i:c:s0040162521001220

DOI: 10.1016/j.techfore.2021.120690

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