How does environmental regulation influence China's carbon productivity? An empirical analysis based on the spatial spillover effect

Abstract: The rational implementation of environmental regulation and efforts to improve carbon productivity are the practical choices for China to address climate change. This paper mainly explores the correlations between environmental regulation and carbon productivity in China. The study first measures and analyzes carbon productivity and its changes. The results indicate that China’s carbon productivity experienced several fluctuations during the study period. Overall, the carbon productivity is currently in a stable rising phase. According to the empirical research on the basis of the spatial spillover effect, a positive spatial correlation exists between carbon productivity in the different regions of China, and there is a threshold for the impact of environmental regulation on carbon productivity. As the intensity of environmental regulation changes from weak to strong, its effect on carbon productivity in local regions will be affected and change from negative to positive. Similar effects will be seen in neighboring regions. At present, the average intensity of China’s environmental regulation has not yet reached this threshold. The eastern region’s average intensity of environmental regulation is closest to its threshold, while the average intensities of the central and western regions are far from their respective thresholds. There is great potential to improve China’s carbon productivity through the implementation of appropriate environmental regulations.