Low-Carbon Governance, Fiscal Decentralization and Sulfur Dioxide Emissions: Evidence from a Quasi-Experiment with Chinese Heavy Pollution Enterprises

Ping Guo, Jin Li, Jinsong Kuang, Yifei Zhu, Renrui Xiao, Donghao Duan and Baocong Huang
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Ping Guo: School of Economics & Trade, Hunan University, Changsha 410079, China
Jin Li: School of Economics & Trade, Hunan University, Changsha 410079, China
Jinsong Kuang: School of Economics & Trade, Hunan University of Technology and Business, Changsha 410205, China
Yifei Zhu: School of Economics & Trade, Hunan University of Technology and Business, Changsha 410205, China
Renrui Xiao: School of Economics & Trade, Hunan University, Changsha 410079, China
Donghao Duan: School of Economics & Trade, Hunan University, Changsha 410079, China
Baocong Huang: School of Public Administration, Hunan University, Changsha 410079, China

Sustainability, 2022, vol. 14, issue 6, 1-24

Abstract: This paper investigates the effects of enterprise environmental governance under low-carbon pilot policies in China with a difference in differences (DID) design. In examining the development of these policies, we focus on exploring their effects on sulfur dioxide emissions of heavily polluting enterprises based on prefectural city- and firm-level data. Overall, the policies significantly increased enterprise sulfur dioxide emission, and the underlying reason being that investments in carbon dioxide emissions control crowded out investment in sulfur dioxide emission control in enterprises in low-carbon pilot regions. We also find that the implementation of low-carbon pilot policies resulted in greater sulfur dioxide emission from state-owned enterprises and enterprises in western regions than from non-state-owned enterprises and those in eastern regions. It is further found that fiscal decentralization and the associated mediating effect of market segmentation promote enterprises’ carbon dioxide emissions control and inhibit their sulfur dioxide emission control. This study helps us re-examine the overall environmental effects of low-carbon policies and has implications for the revision and improvement of environmental governance policies in developing countries.

Keywords: low-carbon pilot city; fiscal decentralization; sulfur dioxide emissions; DID; sulfur dioxide treatment input; heavy pollution enterprises (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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