Analysis of the influence and coupling effect of environmental regulation policy tools on industrial green and low-carbon transformation.

Industrial green and low-carbon transformation plays a crucial role in China's efforts to achieve its Carbon peaking and Carbon neutrality objectives. The implementation of environmental regulation policies is a key institutional framework that facilitates this transformation. Therefore, it is of great importance to explore the impact and interplay of these policies on industrial green and low-carbon transformation to foster high-quality economic development. This study categorizes environmental regulation policy instruments into three types: command-type, investment-type, and expense-type. Using industrial panel data from 30 provinces in China spanning the period from 1997 to 2021, both theoretical analysis and empirical testing are conducted to investigate the effects of these different policy instruments on industrial green and low-carbon transformation. The benchmark regression results show that the impact of command-type environmental regulation and investment-type environmental regulation on industrial green and low-carbon transformation shows an inverted U-shaped feature of rising first and then declining. The impact of cost-based environmental regulation on industrial green and low-carbon transformation shows a U-shaped feature of decreasing first and then increasing. The coupling of command-type environmental regulation and investment-type environmental regulation, command-type environmental regulation and expense-type environmental regulation, and the coupling of the three kinds of environmental regulation can promote industrial green and low-carbon transformation. The mechanism test results show that the impact of formal environmental regulation on industrial green and low-carbon transformation has a transmission mode of "formal environmental regulation-green technology innovation path-green and low-carbon transformation."