Accelerating efficiency of green technology innovation on carbon mitigation under low-carbon regulation

According to the transaction cost theory for carbon mitigation, green technology innovation must achieve energy conservation and emission reduction through appropriate low-carbon regulation. As a consequence, this study compared the punishment effect of the carbon tax and the reward effect of carbon subsidy on the performance of green technology innovation in China's provincial industries from 2006 to 2017. We also elucidated that the enterprises' green technology innovation restricts and stimulates the role of low-carbon regulation on green efficiency in the case of the double threshold effect of carbon dioxide emission. Based on this framework, the integrated tax-subsidy policy for carbon mitigation has a significant differential effect on green efficiency, which changed from an inhibition effect in the high-carbon stage to a promotion effect in the low-carbon stage. And the validity of low-carbon regulations increases with the reduction degree of carbon dioxide emission. But it all depends on whether low-carbon regulations stimulate the enterprises' willingness to green technology innovation, and whether innovations generate incentives that both increase carbon dioxide emissions and compensate for their innovation cost. Otherwise, enterprise performance should adopt follow strategy more than green technology innovation. Therefore, we further suggested that offsetting the costs of green technology innovation through carbon subsidies would improve the willingness of enterprises to make technological progress and increase the likelihood of carbon reductions which can help the peak in China's carbon emissions.