Does Environmental Regulation Affect Natural Gas Consumption? Evidence from China with Spatial Insights

Xiaolin Wang, Xiangyi Lu, Na Zhou, Jianzhong Xiao and Jun Chen
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Xiaolin Wang: School of Economics and Management, China University of Geosciences, Wuhan 430074, China
Xiangyi Lu: School of Economics and Management, China University of Geosciences, Wuhan 430074, China
Na Zhou: School of Economics and Management, China University of Geosciences, Wuhan 430074, China
Jianzhong Xiao: School of Economics and Management, China University of Geosciences, Wuhan 430074, China
Jun Chen: School of Marxism, China University of Geosciences, Wuhan 430074, China

Sustainability, 2020, vol. 12, issue 8, 1-18

Abstract: How environmental regulations affect natural gas consumption in China is an urgent issue that must be addressed to achieve the optimal allocation of natural gas resources. The nonspatial panel model and spatial Durbin model have been applied in this paper to explore the impact of environmental regulation on gas consumption and the influence mechanism of such regulation. The results show that there is a N-inverted curve between environmental regulation and gas consumption at the national level. Three main mechanisms (or paths) by which environmental regulation affects natural gas consumption are discovered: controlling the total amount of coal in the energy mix, reducing industrial coal consumption and adjusting energy market prices. The first and third paths positively and significantly affect gas consumption, while the second path negatively affects gas consumption. Second, the spillover effects of environmental regulation promote the growth of gas consumption and integration of the natural gas market at the national level. Considering the provincial level, however, some regions have high regulation-high gas consumption intensity (HH), while others have low regulation-low gas consumption intensity (LL). Based on the above conclusions, we give recommendations for improving energy regulations in different regions to promote the development of regional natural gas markets.

Keywords: natural gas consumption; environmental regulation; government competition; influence mechanism (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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