Balancing Environmental Regulation and Marketization: A Quantile Analysis of Energy Efficiency in China’s Provinces

This study investigates the impact of environmental regulations and marketization on energy efficiency in China using panel data from 30 provinces covering the period from 2008 to 2016. The analysis employs fixed effects regression, quantile regression, and heterogeneity analysis methods to provide comprehensive insights. The fixed effects regression results reveal that both command-and-control (CAC) regulations and market-based (MBR) regulations exert a negative impact on energy efficiency. Notably, marketization significantly mitigated the adverse effects of CAC regulations. Quantile regression analysis indicates that both negative impacts are more pronounced at lower energy efficiency levels, whereas marketization (MR) significantly mitigates these effects. Heterogeneity analysis further identified regional disparities, with CAC regulations yielding more significant negative impacts in the Western and Central regions and MBR showing stronger effects in the Western region. The results advocate for regionally differentiated policies that account for local economic, infrastructural, and institutional contexts to enhance energy efficiency outcomes rather than relying on one-size-fits-all approaches.