How Does Environmental Regulation Promote Environmental Total Factor Productivity: Evidence From China's Total Carbon Emission Control Policy

ABSTRACT To address the challenge of reducing carbon emissions and achieving carbon neutrality, assessing the efficacy of total carbon emission control policy (TCP) is imperative for the pursuit of sustainable economic growth in China. This study leverages a dataset comprising 282 Chinese cities across the period from 2010 to 2021 to quantify China's environmental total factor productivity (ETFP). Employing the differences‐in‐difference (DID) approach, this research scrutinises the influence of TCP on ETFP. The findings reveal that the implementation of TCP significantly enhances ETFP within the regions subject to the policy. Notably, the policy exerts a more pronounced influence on ETFP in the eastern regions, cities reliant on resource extraction and those with higher administrative status. The promotion of ETFP through TCP is largely mediated by advancements in technology and shifts in the industrial landscape. This study offers valuable insights to facilitate the effective rollout of TCP in China.