Exploring the impact of dual environmental regulation on regional carbon emission: evidence from China

Environmental regulations wield significant influence in mitigating carbon emissions within the context of production practices. The main body can be roughly divided into two categories: one is the formal environmental regulation that fully reflects the strict requirements of the government on the environmental layer, and the other is the informal environmental regulation that is fully supervised and participated in by non-governmental organizations and people in society. This article has amassed panel data spanning from 2011 to 2019 across 30 provinces in China, employing a bidirectional fixed-effects model to empirically scrutinize the impact of dual environmental regulations, both formal and informal, on regional carbon emissions. The results indicate: Firstly, both formal and informal environmental regulations are capable of effectively mitigating carbon emissions. Specifically, each percentage point increase in formal and informal environmental regulation reduces carbon emissions by 8.55% and 0.01%, respectively. Secondly, formal environmental regulations facilitate the enhancement of China's environment through industrial structural upgrades and foreign direct investment, while informal environmental regulations manifest a "concealing" effect. Government intervention and technological innovation further reinforce the carbon reduction efficacy of environmental regulations. Lastly, concerning heterogenous outcomes, formal and informal environmental regulations exhibit distinct carbon emission reduction effects across provinces characterized by varying geographic locations, degrees of marketization, and levels of reliance on natural resources. Furthermore, when the level of foreign investment exceeds a certain threshold (9.0625), the carbon emission reduction effectiveness of informal environmental regulations experiences a notable decline. The findings of this study offer empirical evidence and policy insights to support China's rational implementation of environmental regulations and expedite the promotion of carbon emission reduction.