Emission leakage and the effectiveness of regional environmental regulation in China

Bing Zhang and Daxuan Zhao

Journal of Environmental Economics and Management, 2023, vol. 121, issue C

Abstract: This paper examines the emission leakage by the regional environmental regulation applied in Beijing and its surrounding area. Using the unique firm-level daily emission data, we develop a novel model to estimate the size of immediate leakage through the price mechanism. Our empirics find that leakage offsets about 60% of the total amount of emission reduction in the regulated region and the aggregate emission reduction is less than two percent. We also use the iron and steel industry as an example to show how the prices of input and output factors respond to the regulation.

Keywords: Leakage; Environmental regulation; Industrial emissions; China (search for similar items in EconPapers)
JEL-codes: Q52 Q53 Q58 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:121:y:2023:i:c:s0095069623000876

DOI: 10.1016/j.jeem.2023.102869

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