Fiscal decentralization, environmental regulation, and carbon emission reduction effects

Based on data from 31 provincial-level administrative regions from 2009 to 2023 (excluding Hong Kong, Macao, and Taiwan), this study empirically analyzes the impact of fiscal decentralization and environmental regulation on carbon emission reduction effects through a "time-province" two-way fixed effects model. The research findings indicate that: fiscal decentralization significantly enhances the effects of carbon emission reduction; environmental regulation effectively improves carbon emission reduction effects; fiscal decentralization plays a moderating role in the relationship between environmental regulation and carbon emission reduction effects; the impact of environmental regulation on carbon emission reduction exhibits heterogeneity in areas of high and low population density; and the effect of environmental regulation on carbon emission reduction shows heterogeneity in regions with high and low innovation capabilities;the impact of fiscal decentralization on carbon emission reduction demonstrates regional heterogeneity across the eastern, central, and western regions.