The impacts of environmental protection tax reform in resource-based regions based on the CGE model

Economic transformation and development serve as effective strategies for resource-based regions to avoid the "resource curse." By optimizing industrial structure and enhancing energy efficiency through government macro-regulation, these regions can achieve sustainable and environment-friendly growth. The general equilibrium model is widely employed to assess the effectiveness of economic transformation and development. In this study, we constructed a provincial social accounting matrix based on macro data from Shanxi, China, to examine the impact of different environmental protection tax rates on the macro economy, industrial structure, and energy consumption. The findings reveal that the implementation of environmental protection tax has successfully optimized the industrial structure and improved energy utilization efficiency. However, it has also led to a slight decline in total output. Hence, it is imperative to establish a more balanced and reasonable environmental protection tax rate to further promote economic transformation and development in resource-based areas. Consequently, this paper puts forth policy recommendations aimed at achieving a harmonious balance between ecological preservation and economic progress in resource-based regions, ultimately enhancing the overall quality of economic development in such areas.

Has environmental protection tax reform promoted green transformation of enterprises? Evidence from China

Facing the increasingly stringent constraints of resources and the environment, the green transformation of enterprises is imperative. This study selects A-share listed companies in Shanghai and Shenzhen from 2014 to 2021 as samples, using the difference-in-differences method to examine the impact of the environmental protection tax reform (EPTR) on the green transformation of enterprises. The results indicate that the EPTR can promote the green transformation of enterprises, achieving this through three channels: raising the cost of pollution, strengthening the rigidity of law enforcement, and breaking the collusion between the government and enterprises. Notably, this promotional effect is more significant in non-state-owned enterprises, companies in the eastern and western regions, firms with low financing constraints, and those with high media attention. Further analysis shows that the EPTR has a positive impact on the green total factor productivity (GTFP) of enterprises, which implies that enterprises are not only proactively pushing for a green transformation at the strategic level but also taking practical actions. This study responds to the problem of the greening of tax system to promote the green development of enterprises from two aspects of enterprise strategic implementation and productivity and explores the impact mechanism from the perspective of institutional logic. It enriches the research on the effectiveness of the EPTR at the micro-level and broadens the research perspective on the impact mechanisms of environmental regulation. The findings of this study provide references for further optimising relevant policies and regulations and also offer insights for other countries and regions seeking sustainable development.

Can environmental protection tax force enterprises to improve green technology innovation?

The introduction of an environmental protection tax enables a smooth shift from the sewerage charge system to the environmental protection tax scheme. This, in turn, promotes a more sustainable development of enterprise growth, emphasizing eco-friendliness. This is of immense importance in advancing environmentally aware practices and sustainability. Based on data collected from A-share listed companies in Shanghai and Shenzhen from 2014 to 2021, this paper investigates the influence of environmental protection taxes on the advancement of green technology and the underlying mechanisms. Taking the execution of the Environmental Protection Tax Law in 2018 as a quasi-natural experiment, a double-difference model is employed to examine the causal relationship between environmental protection taxes and the adoption of green technology by companies. The findings indicate that the introduction of an environmental tax could markedly enhance the extent of green technological innovation within corporations. The evidence arising from the testing mechanism implies that such a tax can encourage firms to boost their investments in research and development, upgrade their innovative human capital, and mitigate financing limitations. The study found that there is heterogeneity in the promotion effect of the environmental protection tax on the green technological innovation of businesses in different regions and provinces with varying tax burdens and types of equity capital. Further research shows that the environmental protection tax has a greater impact on the promotion of utility model patent applications for green technology innovation. This paper presents empirical evidence to support further enhancement of the environmental protection tax system. It recommends designing the environmental protection tax policy with consideration for enterprises and local conditions and bolstering the system's capacity for guiding and stimulating enterprises' green development.

The impact of green technology innovation and firm default risk: benefit effect or risk effect?-evidence from the panel data on Chinese manufacturing firms

In the context of China's strategic goal of carbon neutrality, the realization of green technology innovation to reduce the risk of manufacturing default will help promote the green transformation of firms and achieve high-quality economic development. The study explored the relationship between green technology innovation and default risk by taking the manufacturing industry of listed enterprises in China from 2001 to 2020 as research samples. The results showed that green technology innovation is negatively correlated with default risk. Moreover, the heterogeneity analysis showed that the benefit effect of heavy-polluting enterprises, state-owned enterprises, and large-scale enterprises was more significant. The mechanism analysis showed that green technology innovation can reduce default risk through market position and capital structure. In addition, the study further distinguished that environmental protection tax was conducive to green technology innovation to reduce the occurrence of default risk. In theory, the study expanded the research paradigm between green technology innovation and default risk in theory, and provided new evidence and enlightenment for reducing the default risk of enterprises and supported the green and sustainable development of enterprises in practice.

Does environmental protection tax improve green total factor productivity? Experimental evidence from China

Enhancing green total factor productivity (GTFP) is essential for achieving the objective of green development, and the effect of environmental protection tax (EPT), a crucial instrument for addressing environmental challenges, on green TFP is crucial. Based on provincial panel data from 2004 to 2020 in China, this study uses inter-provincial differences in environmental protection tax rates as a quasi-natural experiment and utilizes a synthetic control method to assess the impact of the "changing sewage charge to tax" on regional GTFP. The empirical results suggest that EPT can help enhance GTFP, a finding that still holds after regional placebo tests, time placebo tests, and difference-in-differences robustness tests. The mechanism test demonstrates that EPT influences GTFP via the industrial structure impact and the green technological innovation effect. According to heterogeneity research, regions with a high level of marketization and financial growth are more significantly affected by environmental protection tax policy. This paper offers crucial empirical data for assessing the efficacy of environmental protection tax policy and enhancing the environmental tax system.

Does the environmental protection tax reduce environmental pollution? Evidence from a quasi-natural experiment in China

The environmental protection tax (EPT) is an important environmental policy in China. However, it remains unclear whether the EPT has reduced environmental pollution effectively since its implementation in 2018. Based on the panel data of 229 prefecture-level cities in China during 2015-2019 and the difference-in-differences (DID) model, this study empirically assesses the causal effect of the EPT on environmental pollution. It is found that the EPT has a significantly negative effect on industrial sulfur dioxide (SO2) and industrial soot (dust) emissions but has no significant impact on industrial wastewater emissions. The mechanism analysis reveals that the EPT has the tax enforcement effect and energy efficiency effect, that is, the EPT reduces pollution emissions through increasing actual tax burden and improving the efficiency of energy utilization. However, the innovation effect is weak, which is only effective in reducing industrial SO2 emissions. Finally, we compare how different types of cities responded to the EPT. The results show that the EPT has limited effect on environmental pollution in large cities and southern China.

Re-examining the governance effect of China's environmental protection tax

China has long exercised environmental control through the imposition of sewage charges. The start of the environmental protection tax on January 1, 2018, means that China has entered a new phase of environmental control. Unlike many previous studies on the role of environmental taxes at the firm level, this paper examines whether environmental taxes affect pollution emissions by influencing the behavioral choices of micro-actors. This paper first reviews the Pyrrhic tax, the Porter hypothesis, and the "double dividend effect." We then construct provincial panel data for 30 provinces in China from 2012 to 2019 as a sample, use the environmental protection tax as a natural experiment to evaluate the policy of this environmental protection tax using propensity score matching and difference-in-differences model, investigate the intermediate transmission mechanism of the policy implementation, and then analyze the differences in policy effects between provinces with different levels of economic development. The increased tax burden in 2018 led to a general reduction in provincial pollution emissions in which technological innovation by various groups, including firms and universities, had a mediating role.

Environmental protection tax and green innovation

How environmental taxes affect green innovation in businesses is closely related to enterprise sustainable development and green economic development. This study uses the data of non-financial listed companies from 2010 to 2020 in China, and adopts the difference-in-difference method to examine the effect of the environmental protection tax (EPT) on corporate green innovation in China. Results show that EPT reform has a significantly negative effect on corporate green innovation, and the robustness test supports this result. EPT has a larger inhibitory effect on non-state-owned enterprises' green innovation than state-owned enterprises. This inhibiting effect is particularly prominent in companies situated in northern and low-marketization regions. Further analysis shows that EPT affects enterprises' green innovation by reducing the cash flow and financing of enterprises. This study provides an empirical basis for the implementation of the EPT policy.

Green growth and environmental sustainability in China: the role of environmental taxes

This study aims to investigate the impact of environmental-related taxes on green growth and CO2 emissions in China covering the time 1996-2019. To get the short- and long-run estimates, we have applied the bounds testing approach. Estimates of the study provide some important results. In the short run, environmental taxes and environmental policy stringency estimates are negatively significant in the CO2 emissions models and positively significant in the green growth models. Likewise, the long-run estimates attached to environmental taxes are significantly negative in the basic and robust CO2 emissions models while insignificant in the green growth models. However, the long-run estimates of environmental policy stringency are significantly negative in the basic and robust CO2 emissions models and significantly positive in the basic and robust green growth models. In general, our findings imply that an increase in environment-related taxes and strictness in environmental policies help reduce CO2 emissions and promote green growth in China.

Assessing impacts and determinants of China's environmental protection tax on improving air quality at provincial level based on Bayesian statistics

Facing severe PM_2.5 pollution, China has adopted a series of clean air policies since 2013, but PM_2.5 concentrations in China remain serious. Weighing both sustainable development and environmental protection, the Environmental Protection Tax Law was implemented in 2018 in China. This research employed a Bayesian space-time model to identify the impacts of the environmental protection tax on PM_2.5 pollution (IEPTPM_2.5P) at the provincial level in 2018 in China, combining remotely sensed and in-situ monitoring data. Then the influence factors of the IEPTPM_2.5P was investigated using a Bayesian LASSO regression model. Results indicate that the IEPTPM_2.5P resulted in a decreasing trend of annual PM_2.5 concentrations in 31 provinces. The spatial pattern of the IEPTPM_2.5P presented a distinct geographical feature. The highest five IEPTPM_2.5P occurred in Beijing, Tianjin, Shanghai, Shandong, and Hebei, and the corresponding values were -1.81, -1.79, -1.52, -1.51, and -1.47 μg/m³ per year, respectively. Tourism output value associated negatively with the IEPTPM_2.5P, and the other five variables associated positively with the IEPTPM_2.5P. The urbanisation rate and relief amplitude were the top two influencing factors, with contributions of 36.3% and 19.3%, respectively. The IEPTPM_2.5P increased 0.0141 μg/m³ per year (95% credibility interval (CI): 0.0013, 0.0259) if the urbanisation rate increased one percentage point. The influencing contributions and magnitudes of the tax rate for air pollutants and the environmental tax revenue are 9.6% and 12.1%, 0.0016 (95% CI:-0.0038, 0.0076) and 0.0108 (95% CI:-0.0188, 0.0412) μg/m³ per year, respectively.

A bi-level multiobjective optimization model for waste load allocation in rivers

It is often difficult to apply existing waste load allocation (WLA) models to management institutions at all levels of the river basin because the existing WLA models do not consider the principles of fairness and efficiency at each management level of the basin. The implementation of environmental protection tax law has also greatly impacted WLA. This paper proposes the bi-level multiobjective allocation model under an environmental protection tax law to solve the WLA problem for different management levels. The upper allocation targets the minimal environmental Gini coefficient and the minimal unit pollutant emission cost. The impact of the environmental protection tax is also considered. The targets of the lower-level allocation are the maximal industrial output value and the minimal unevenness of reduction rates. The proposed model was applied to the case of the Wei River basin, and the results demonstrated that the bi-level multiobjective allocation model could solve the problem of WLA under an environmental protection tax law. Each level of the bi-level multiobjective allocation model considers the principles of fairness and efficiency to distribute the load in the basin, thereby offering a better reference for decision-makers at both levels.