Does de-capacity policy promote the efficient and green development of the coal industry? -Based on the evidence of China

The backward capacity to be cleared is the focus of attention under the background of carbon neutralization, while it is still unclear whether the de-capacity policy in 2016 improves the efficient and green development of China's coal industry under this background. We attempt to examine the changes in the economic benefits, labour efficiency, and green efficiency of the coal industry, and explore the impact of the policy on China's coal industry using the differences-in-differences (DID) methods with a series of robustness tests. The main results show that: (1) The implement of de-capacity policy in 2016 has significantly improved the economic benefits of the coal industry; (2) After the implement of de-capacity policy, the labour efficiency of the coal industry have increased multiply, and the effect of de-capacity policy is positive; (3) The dynamic effect of de-capacity on green efficiency is positive but unstable. Therefore, although the coal de-capacity policy has achieved certain results, it still needs to establish and perfect the long-term advancement-ship for eliminating backward production capacity and preventing the resumption of reduced production capacity under the background of carbon neutralization.

Automated summary

This study examines the impact of the 2016 de-capacity policy on China's coal industry and finds that it significantly improves the economic benefits and labor efficiency of the industry, but its effect on green efficiency is unstable. Therefore, a long-term advancement mechanism is needed to eliminate backward production capacity and prevent the resumption of reduced production capacity, especially in the context of carbon neutralization.