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Heterogeneous low-carbon targets and energy structure optimization: Does stricter carbon regulation really matter?

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  • Yang, Zhenbing
  • Shi, Qingquan
  • Lv, Xiangqiu
  • Shi, Qi

Abstract

In this study, we use the difference-in-difference strategy to examine the effect of stricter carbon regulation on energy structure. We find that, under stricter carbon regulation, regions with above-average carbon intensity reduction targets (CIRTs) prefer to use high-carbon energy. This conclusion is found to be reliable after the robustness tests; the regions with moderate CIRTs prefer to use low-carbon energy. When low-carbon targets are increased, the effect of the policy is much greater. The reason is that above-average CIRTs lead to an improved marginal output growth rate and an increased technological bias of high-carbon energy. This increased bias further causes enterprises to increase the scale of high-carbon energy input and reduce the proportion of low-carbon energy. This study reveals that, under the constraints of the low-carbon policy, stricter carbon regulation is not conducive to optimizing the energy structure, while moderate CIRTs are conducive to increasing the consumption of low-carbon energy.

Suggested Citation

  • Yang, Zhenbing & Shi, Qingquan & Lv, Xiangqiu & Shi, Qi, 2022. "Heterogeneous low-carbon targets and energy structure optimization: Does stricter carbon regulation really matter?," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 329-343.
    • Handle: RePEc:eee:streco:v:60:y:2022:i:c:p:329-343
    DOI: 10.1016/j.strueco.2021.12.008
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