The Chinese government is dedicated to accelerating China's shift towards a low-carbon and green economy. Given the presence of the carbon rebound effect, the efficacy of enhancing carbon emission efficiency in curbing emissions could be diminished. Thus the government has issued various environmental regulatory policies. During the execution of individual environmental policies, challenges arise, including incentive misalignment, grassroots rivalry, and jurisdictional limitations, which collectively impede the harmonized advancement of carbon reduction, pollution mitigation, and sustainable economic growth. The modernization of environmental governance from administrative control to market incentives and then towards voluntary environmental governance is of great significance to China's achievement of the dual carbon target.
Existing studies mainly suffer from the following shortcomings: first, existing studies have explored the environmental effects of the single policy instruments of environmental tax levy and energy right trading pilot, which provides a rich literature base for this paper, but the literature has neglected the linkage effect of dual environmental policy constraints in the context of dual-carbon. Second, few existing empirical analyses directly explore the impact of dual environmental policy constraints on urban carbon rebound. Finally, there is little literature exploring the path mechanism of dual environmental policy constraints to inhibit carbon rebound from the perspective of green innovation chain.
On the basis of the dual environmental constraints of China's environmental tax and energy right trading pilot, this paper utilizes balanced panel data from 282 Chinese cities from 2010 to 2022. It examines the impacts of dual environmental policy constraints—namely, the command-and-control strong constraint of environmental protection fee-to-tax policy and the market-incentive weak constraint of energy-use right trading—on the carbon rebound effect from the perspective of the green innovation chain, using Difference-in-Difference (DID) and Difference-in-Difference-in-Difference (DID) models.
The findings indicate that compared with a single environmental constraint, dual environmental constraints have a more pronounced synergistic effect on carbon rebound. Mechanism analysis reveals that all links of the green innovation chain significantly inhibit the carbon rebound effect, with green knowledge spillover having the strongest policy effect, followed by green science and technology innovation, and green product innovation having the weakest effect. Expanded discussion shows that dual environmental constraint policies have spatial spillover effects on suppressing carbon rebound in neighboring cities, with significant effects in the eastern and western regions but not in the central part of the country. In the assessment of the long-term and short-term effects, the dual environmental constraint policies exhibit heterogeneity in their effects, and the long-term effects are better.
The potential contributions of this paper include, first, on the research perspective. From the perspective of strong and weak environmental policy constraints, it explores the impacts of the dual environmental constraint policies of command-and-control-type strong constraints of environmental protection fee-to-tax policy and market-incentive-type weak constraints of energy-use right trading on urban carbon rebound and its functioning mechanism, and expands the path of rebound suppression realization. Second, the research mechanism. Starting from the perspective of green innovation chain, the study divides the green innovation chain into upstream, midstream and downstream based on the formation of innovation value, analyzes the mechanism of the dual environmental policy constraints on urban carbon rebound through the links of the green innovation chain, and verifies Porter's hypothesis in the context of the green innovation chain. Third, the research content. It comprehensively examines the environmental effects of dual environmental policy constraints from the dimensions of regional heterogeneity, spatial spillover effects, and long- and short-term effects of urban carbon rebound, enriches the related research on the inhibition of carbon rebound by the combination of strong and weak environmental regulations, and provides empirical evidence to support the governmental departments in formulating differentiated policies and promoting the development of low-carbon transition.This paper extends the research on carbon rebound and provides empirical evidence to support that carbon rebound can be curbed by a combination of dual environmental constraints.