Research on the effects of market integration on carbon emissions

Abstract

Purpose The purpose of this paper is to analyze the linear and nonlinear effects of market integration on carbon emissions and explore the direct and indirect paths of market integration on carbon emissions through path analysis. Design/methodology/approach The authors first conduct a measurement and contrastive study of the market integration and carbon emissions of China’s 28 provinces from year 1995 to 2015. Then, the linear effect of market integration on carbon emissions is analyzed by using the fixed-effect model. Next, based on the path analysis method, the direct and indirect paths of market integration’s impact on carbon emissions are explored. Finally, the panel threshold regression model is used to evaluate the effect of market integration on carbon emissions under different situations of geographic distance. Findings The results show that first, the improvement of market integration can increase carbon emissions in the form of a linear relationship. Second, market integration not only has a direct and positive impact on the carbon emissions, but also has an indirect and positive impact on carbon emissions through the level of economic development, and a negative impact on carbon emissions through technological level. Third, an increase in market integration can reduce its positive effect on carbon emissions, but the improvement of economic growth and technology level can both enhance the positive effect of market integration on carbon emissions. Research limitations/implications This paper focuses on the impact of market integration on carbon emissions in 30 provinces in China, while, the authors do not conduct a comparative analysis of different regions, so there are certain limitations. In addition, policy interaction between regional governments is also a key factor affecting carbon emissions, but this paper does not consider the effect of policy interaction, future follow-up research will try to incorporate it into the analytical models. Practical implications An important practical implication of this research is that market integration should be regarded highly in China’s energy conservation and emission reduction efforts. The research results have important reference value for policy authorities to formulate relevant policies. That is, the government can play a more active role in the process of integration through breaking the regional blockade and interest barriers to comprehensively improve resource utilization efficiency and technical level, and ultimately achieve regional low-carbon development. Originality/value This paper explores the effects of market integration on China’s carbon emissions based on different methods and perspectives, and confirms that market integration plays a vital role in China’s carbon emissions through economic growth and technological progress. Notably, based on the studied results, some specific and practical suggestions are proposed in this paper so as to reduce carbon emission and realize the sustainable development of economy and society in China.

Can Regional Integration Reduce Urban Carbon Emission? An Empirical Study Based on the Yangtze River Delta, China

“…Due to differences in development levels and resource endowments, heterogeneity exists in the environmental regulation systems of different cities. The disparity in pollution treatment costs distorts the incentives for collaborative treatment, leading some cities to adopt a development model of beggar-thy-neighbor, which is unfavorable for the promotion of environmental collaborative governance and carbon emission reduction [23,31].…”

“…Environmental collaborative governance has consequently become an important theme of integration cooperation [3,18]. Environmental regulation measures and relevant policies among cities tend to be consistent, which weakens the incentive distortion due to differences in environmental regulation systems [31]. For example, based on transfer payment for environmental governance cooperation, less-developed cities have obtained sufficient funds to carry out pollution governance.…”

“…The improvement of environmental regulations brings about rent-seeking space reduction and pollution costs increase, forcing the shutdown and transfer of high-emission and high-pollution enterprises. These are replaced by clean production methods, thus realizing the reduction of urban carbon emissions [3,31].…”

“…However, other cities accelerate energy consumption and increase carbon emissions while clustering high-energy-consuming enterprises to promote economic development. This reshapes the regional carbon emission pattern [21,31]. Thirdly, regional integration can enhance the urban factor agglomeration level [22].…”

“…In contrast, less-developed cities may become pollution heavens for low-end factors. For example, the controversies over the pollution paradise or pollution halo of foreign direct investment are rooted in the foreign investment quality gap [14,15,31]. Overall, regional integration affects urban carbon emissions through industrial structure optimization and reshapes regional carbon emission patterns.…”