Emissions cap and structural adjustment11 The authors acknowledge financial support from the Natural Science Foundation of China (No. 72341008, 72341011, 72121002) and Ministry of Education Project of Key Research Institute of Humanities and Social Sciences at Universities in China (No. 22JJD790058, 22JJD790013).

Abstract

We use the strengthening of China's emission target control regime during the Eleventh Five-Year Plan period as a quasi-natural experiment to study the impact of strengthened environmental regulation on firm's emissions and other economic performances, and find that more rigorous environmental regulations induce firms to cut down their emissions, mainly through the “technology effect.” The structural decomposition shows that this emission reduction effect varies across industries with different levels of pollution intensity, and the power sector plays an important role in the “structural adjustment effect” among industries.

Keywords

• Emissions cap
• Technological effect
• Synergistic reduction