Regulation on Pollutant Discharge Permits and the Development of Green and Low-Carbon Industries: Macro and Micro Evidence from Environmental Economic Geography

【Authors】

YU Zhong, TONG Menghua & ZHANG Guojian

【WorkUnit】

YU Zhong, TONG Menghua (Dongbei University of Finance and Economics, 116025)；ZHANG Guojian (Nanjing Audit University, 211815)

【Abstract】

The report to the 20th National Congress of the Communist Party of China called on efforts to “boost green and low-carbon industries, improve the system for market-based allocation of resources and environmental factors, and accelerate the R&D, promotion and application of advanced energy-saving and carbon emission reduction technologies”. Despite the strong momentum provided by the carbon peaking and carbon neutrality goals, the development of green and low-carbon industries still face challenges, including unbalanced development and insufficient market entities.
Developing green and low-carbon industries based on market demand is the main approach to cultivating future industrial clusters and a continuous driver for building green innovation highlands. However, there is a lack of research providing a sufficient theoretical basis and empirical evidence on how to better stimulate market potential from the demand side and thereby construct a spatial pattern of high-quality green and low-carbon development.
This paper utilizes enterprise business registration data and economic geographic big data from 2015 to 2023 to explore the impact of the pollutant discharge permit (PDP) system on the development of green and low-carbon industries at both the city and enterprise levels. The findings indicate that the implementation of the PDP system significantly attracts green and low-carbon enterprises. This effect is consistently observed across all sub-industries within the green and low-carbon sector, except for ecological protection, restoration and utilization. At the micro level, new entrants tend to cluster around industrial enterprises regulated by the PDP system. Mechanism analysis indicates that the demand for urban environmental governance and corporate green transformation is the primary driver behind the development of green and low-carbon industries. In addition, PDP regulation significantly reduces market transaction costs and fosters innovation and integrated development between traditional industrial firms and green and low-carbon enterprises. Further analysis reveals that the PDP system can not only coordinate efforts to cut carbon emissions, reduce pollution, pursue green development, and boost economic growth, but also simultaneously raise the quantity and quality of green and low-carbon industries.

JEL: O32, Q56

【KeyWords】

Green and Low-Carbon Industries, Pollutant Discharge Permits, Demand-Induced, Innovation and Integrated Development