Mandatory targets and the Environmental Kuznets Curve: analyzing government-driven environmental policy in China

Target setting functions as a starting point and a pivotal mechanism in government performance management, particularly within China’s institutional framework of ‘target-driven governance.’ Scholars have examined the positive effects and potential risks of target setting; however, exploration of its coordinating role remains limited. This study focuses on the Environmental Kuznets Curve (EKC) phenomenon in China, investigating how governmental target setting shapes this curve and exploring the underlying coordinating mechanisms behind such target setting practices, using Chinese provincial panel data. Results indicate that environmental target setting has shaped EKC in China’s provincial areas, thereby demonstrating the coordinating role inherent in target setting practices. Heterogeneity analysis shows that environmental target setting strongly coordinates the environment and economy in developing regions, whereas nonregulatory factors dominate inverse U-curve turning points in developed areas. This demonstrates that the coordinating role of target setting is conditionally transformative. This study addresses the research gap in the role of target setting mechanisms within coordinated governance frameworks using China’s environmental governance practices as an analytical entry point. These empirical findings strengthen institutional frameworks for green development and outline a practical pathway for aligning target setting strategies with the Sustainable Development Goals.