Recessive environmental regulation and energy conservation and emission reduction

Abstract

This study examines the direct and indirect effects of recessive environmental regulations, namely public supervision on energy conservation and emission reduction. Based on provincial data in eastern China for years 2008-2016 and panel data analysis, it is shown that direct supervision has no impact on improving energy efficiency. However, recessive environmental regulation can decrease per capita energy consumption indirectly through optimizing the structure of foreign investment and stimulating foreign green investments. Moreover, such regulation has the potential to decrease energy consumption per unit of GDP indirectly by accelerating industrial restructuring and promoting technological innovation. Given these results, it is suggested that the public and Non-Governmental Environmental Protection Organization in eastern China should be used more intensively to promote energy saving and emission reduction. Keywords: recessive environmental regulation; energy conservation and emission reduction;