The threshold effect of cost-based environmental regulation on thermal power generation environmental governance efficiency

A network data envelopment analysis slack-based measure (NSBM) was applied to explore the thermal power generation environmental governance efficiency (TGGE) of 30 provinces in China except Tibet from 2006 to 2015, and then the threshold panel data model was established to study the nonlinear impact of cost-based environmental regulation (CER) on TGGE. The results show that (1) thermal power generation efficiency (TGE) is relatively low but shows a fluctuation growth trend, and TGGE is lower than thermal power generation production efficiency (TGPE); (2) CER has a significant single-threshold effect on the TGGE in China. When the proportion of CER to gross domestic production (GDP) is less than 3.023, the regulation has a significant positive effect on TGGE, while when the proportion of CER to GDP is larger than 3.023, the positive effect is greatly reduced from 0.073 to 0.002. The same conclusion can be obtained using the ratio of CER to gross industrial output value as the threshold variable, although with a different threshold value. From the average value of the sample period, for the vast majority of provinces, the effects of CER on TGGE are not significant. Based on these, relevant policy implications are presented to further promote TGGE.

Automated summary

The study revealed that the efficiency of thermal power generation in China is relatively low with a fluctuating growth trend. Cost-based environmental regulation has a significant single-threshold effect on thermal power generation environmental governance efficiency, showing a significant positive effect when the proportion of regulation to GDP is below a certain threshold, but diminishing as the proportion increases.