Effect mechanism of Chinese-style decentralization on regional carbon emissions and policy improvement: evidence from China's 12 urban agglomerations

Chinese-style decentralization has brought about the miracle of rapid economic growth for more than thirty years in China. However, with the implementation of the coordinated development strategy of economy and environment, it has set up obstacles to the decrease in regional carbon emissions. In this study, we clarified the effect of Chinese-style decentralization on regional carbon emissions. Then, we tested the effectiveness of emission reduction policies and their potential emission reduction spaces under the Chinese-style decentralization using the panel data of China's 12 urban agglomerations. The research results are: (1) Chinese-style decentralization affects regional carbon emissions mainly through factor market distortion, investment bias, and environment regulation. (2) Under the influence of Chinese-style decentralization, the effectiveness of emission reduction policies is not fully realized and shows significant spatial interaction. (3) 1% increase in political decentralization causes an 8.9% decrease in the effectiveness of executive order policy; 1% increase in fiscal revenue decentralization causes a 7.1% decrease in the effectiveness of carbon tax policy; 1% increase in financial decentralization causes a 10.6% decrease in the effectiveness of the cleaner production policy. (4) Collaborative governance of carbon emissions between regions is the direction of future emission reduction, and the redesign of emission reduction policies should be formulated based on the degree of regional synergy.

Automated summary

Chinese-style decentralization has an impact on regional carbon emissions mainly through factor market distortion, investment bias, and environmental regulation. Under Chinese-style decentralization, the effectiveness of emission reduction policies is limited and shows significant spatial interaction. Increases in political, fiscal, and financial decentralization lead to a decrease in the effectiveness of emission reduction policies. Collaborative governance of carbon emissions between regions is the direction for future emission reduction, and emission reduction policies should be redesigned based on the degree of regional synergy.