Carbon emissions reduction target and green utilization of land resources: Evidence from the industrial land market in China

Abstract

Countries around the world are proposing ambitious carbon emissions reduction targets to combat climate change, but rigorous causal evidence on how these targets affect governments' decisions and resource allocation is relatively scarce. Using a sharp regression discontinuity design, this study finds that tougher carbon targets can effectively green local governments' land resource allocation in China, as evidenced by around 15 % more land being supplied to carbon-friendly industries than under weaker targets. However, given resource reliance and the nature of comparative advantage, local governments do not reduce the proportion of land allocated to carbon-intensive industries when facing tough carbon emissions reduction targets. Further evidence indicates that greater pressure to achieve economic growth, higher career incentives, and stronger competitive pressure weaken the effect of tougher carbon targets on the green utilization of land resources, whereas stronger public attention strengthens the efficacy of carbon targets. Counties with tougher carbon targets than others experience simultaneous reductions in carbon emissions and GDP after increasing the share of carbon-friendly industrial land. This work provides policy implications for promoting the greener utilization of land resources and more sustainable development in the context of governments facing trade-offs between the economy and the environment under a multitasking evaluation system.