Does increasing carbon emissions lead to accelerated eco-innovation? Empirical evidence from China. (1st April 2020)

• Record Type: Journal Article
• Authors: Wang, Weidong; Li, Yaya; Lu, Na; Wang, Dong; Jiang, Hongli; Zhang, Caijing
• Is Part Of: Journal of cleaner production. Volume 251(2020)
• Publication Date: 2020-04-01
• Subjects: Carbon emissions -- Eco-innovation -- Environmental regulation -- CPC-Y02; Factory and trade waste -- Management -- Periodicals; Manufactures -- Environmental aspects -- Periodicals; Déchets industriels -- Gestion -- Périodiques; Usines -- Aspect de l'environnement -- Périodiques; 628.5
• DOI: 10.1016/j.jclepro.2019.119690
• Languages: English
• ISSNs: 0959-6526

Abstract

Abstract: Most of the literature in the field of eco-innovation focuses on how environmental innovation mitigates carbon emissions. In contrast, this study examines whether increasing carbon emissions accelerate eco-innovation using data from China. The mediating role of environmental regulation is also considered as regulations are the most prominent factors discussed in the eco-innovation literature, and they may be mainly caused by environmental changes. Therefore, based on 532, 808 Y02 patents for technologies that mitigate or adapt to climate change—used as a proxy for eco-innovation—and panel data from 30 Chinese provinces for 2004–2016, a regression method is used to estimate a new theoretical framework for determining the carbon emissions, environmental regulation, and eco-innovation link. The results show that increasing carbon emissions lead to accelerated eco-innovation, implying climate change creates opportunities for Chinese innovators. Moreover, carbon emissions are found to have a positive impact on environmental regulation—an issue never empirically studied before. Furthermore, the impact of carbon emissions on eco-innovation is partially mediated by environmental regulation. Specifically, command-and-control and market-based regulation initiated by the Chinese government play mediating roles between carbon emissions and eco-innovation, but voluntary regulation from the public does not play the same role. These direct and mediating roles are further confirmed by the estimation of different categories of environmental technology. Among these technological areas, carbon treatment technologies, Y02C, are the most indirectly impacted from carbon emissions through environmental regulation, but the least directly impacted. By contrast, opposite results are obtained for Y02T technologies, associated with transport. Based on these findings, we suggest that command-and-control and market-based regulation, rather than voluntary regulation, be strengthened to transfer environmental pressure for innovators in China. Moreover, these environmental regulations should be applied more to immature and promising low-carbon technologies such as Y02C.