Dynamic Impact of Environmental Regulation on Environmental Performance in China: New Evidence from a Semiparametric Additive Panel Analysis

Abstract

Environmental protection is the core of sustainable economic development, and environmental policy plays a key role in achieving protection goals. Therefore, it is extremely crucial to evaluate the effectiveness of environmental policies. Existing studies mainly focus on the average impact of environmental policies on environmental pollution but ignore their dynamic impact, which is prone to misestimate the effect of environmental policies. To make up for the deficiency, a semiparametric additive panel data model is used to explore the dynamic impact of China’s sewage charging policy on environmental performance at each level of the levy. The results show that the relationship between sewage charge level and environmental degeneration is an “M-shaped” pattern, indicating that the current sewage charge policy is not absolutely effective. Moreover, the results also reveal an “N-shaped” linkage between economic growth and environmental pollution, indicating that economic development is not sustainable. Moreover, the factors of energy consumption, population growth, and industrialization contribute to increasing environmental degeneration. Although technological development has a positive impact on environmental performance, its impact is insignificant. This study could provide new evidence for strengthening environmental regulatory reform and promoting green economic development.

The Effects of Economic Policy Instruments of Diffuse Water Pollution from Agriculture: A Comparative Analysis of China and the UK

“…Following the polluter pays principle, China started the pilot project of sewage charges in 1979, but in actual implementation, there is a problem of comprehensive supervision by law enforcement agencies [51]. To protect the ecological environment with a strict legal system, the charging system was changed to the ecological tax in 2018.…”