Volume 16: Low Carbon Cities and Urban Energy Systems: Part V

Environmental Regulation and Influence on Energy-Environmental Performance: Evidence on the Porter Hypothesis From China’s Iron and Steel Industry Boqiang Lin, Rongxin Wu

Abstract

Environmental regulation is a critical instrument for achieving sustainable economic and social development. The iron and steel industry is highly polluting and energy-consuming, posing a significant threat to China’s environmental sustainability. Based on the panel of Chinese provincial-level data from 2000 to 2017, this paper empirically examines how environmental regulation affects the iron and steel industry’s green development. The findings show that there is a U-shaped relationship between environmental regulation and energy-environmental performance. Low environmental regulation intensity inhibits the improvement of energy-environmental performance. But as the regulation intensity increases, it contributes to the advancement of energy-environmental performance. Environmental regulation affects the industrial energy-environment performance through technological innovation, and the relationship between environmental regulation and technological innovation presents a U-shaped relationship. There are noticeable regional differences in the impact of environmental regulation on energy-environmental performance. The findings provide new evidence to confirm the Porter Hypothesis. Finally, this paper provides policy suggestions for further energy-environmental performance improvements in China’s iron and steel industry.

Keywords Environmental regulation, Energy-environmental performance, Porter Hypothesis, Tobit model