Effect of local government decision‐making competition on carbon emissions: Evidence from China's three urban agglomerations

Abstract

Analyzing the effect of local government decision‐making competition on regional carbon emissions is important for reducing carbon emissions in rapidly urbanizing areas. Taking the energy rebound effect into account, this study analyzes the effect on carbon emissions of competition between local governments in decision making. Focusing on China's three urban agglomerations, this study further discusses how to avoid this influence. The results show that local government decision‐making competition is one of the main causes of the regional “green paradox”; the effect of local government decision‐making competition on carbon emissions has significant regional heterogeneity and spatial dependence, and the short‐term energy rebound effect is greater than the long‐term energy rebound effect; and local government decision‐making competition has three effects on carbon emissions that also have interaction and substitution effects between them: factor market distortion, investment bias, and the “race to the bottom” of environmental policies. However, four measures can reduce the effect of local government decision‐making competition on carbon emissions: one, improving the performance evaluation system of local governments; two, promoting the marketization of factor prices; three, improving both the energy efficiency and upgrading of industrial structures; and four, introducing macro emission reduction policies that allow the central government to intervene directly.

Economic Growth Targets and Carbon Emissions: Evidence from China

“…As a result, new officials often appear to negate the industrial policies formulated by their predecessors [47], resulting in the government's implementation of industrial policies that often deviate from the policy objectives. Large amounts of resources flow in and out frequently within different industries [48], constraining the optimization and upgrading of regional industrial structures. It has been shown that industrial restructuring and upgrading is an important factor in developing a low-carbon economy [49][50][51], while Gu et al [52] further showed that industrial restructuring and upgrading is an effective driver of CO 2 emission reduction, as well as a fundamental driver of the low-carbon development of the industrial system.…”

Impact of performance contest on local transformation and development in China: Empirical study of the National Civilized City program

“…In addition, in the process of evaluation, local governments may deviate from the main purpose and blindly invest resources, sometimes causing high costs and social tension (Zhang & Li, 2011). On the issue of competition promoting innovation, local governments may attract more FDI by lowering the standards of environmental regulation, which will inhibit regional innovation performance and mutual imitation (Deng et al., 2019), and competition to the bottom may also distort the factor market and investment preference in the decision‐making competition of local governments (Li & Xu, 2020). Therefore, the comprehensive effect of the PCM in local governance is still deserved to carry out further research.…”

Spatio-Temporal Heterogeneity of Carbon Emissions and Its Key Influencing Factors in the Yellow River Economic Belt of China from 2006 to 2019

“…Specifically, the High-High clusters were mainly concentrated in the Shandong Peninsula, such as Dongying, Jinan, linyi, Zibo, and Binzhou. However, the High-High clusters spread to Hohhot and Baotou in 2019, one possible reason is that local officials tend to glorify their political performance by focusing on economic growth rather than pollution reduction, and this leads to the “race to the bottom” in the High-High clusters [ 33 ]. While the Low-Low agglomerations were mainly distributed in the upstream and midstream cities, including Qingyang, Yan’an, Yulin, Linfen, Pingliang, Tianshui, Tongchuan, Longnan, Zhongwei, Baiyin, and Dingxi, highlighting the spatial heterogeneity of carbon emissions in the YREB.…”