Abstract
The environmental protection tax law (EPTL) is China’s inaugural formally legislated market-based environmental tax regime. Whether the EPTL can improve green total factor energy efficiency (GTFEE) is of great importance for China’s sustainable development. Utilizing a sample of China’s 284 prefecture-level cities from 2015 to 2019 and the difference-in-differences method, this study explores the impact of China’s environmental protection tax law (EPTL) on green total factor energy efficiency (GTFEE). Results show that: (1) The EPTL exerts a significant negative impact on GTFEE, a conclusion reinforced by a series of robustness checks; (2) two potential mechanisms are reduced green technology innovation and shifted industrial structure; (3) heterogeneity analysis underscores that the negative effects are more significant in eastern regions, old industrial cities, and cities under high fiscal pressure; and (4) based on the spatial difference-in-differences method, the subsequent analysis reveals a negative spatial spillover effect of the EPTL on GTFEE of neighboring cities. Derived from the above conclusions, this study provides policy recommendations for the long-term formulation of the EPTL.
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The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.
Notes
The “Green Paradox” refers the notion that an increase in taxes could exacerbate existing environmental and climate issues, as such a tax might incentivize producers to shift their production to the present moment, thereby undermining the intended purpose of the environmental tax.
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Su, S., Li, S. Energy efficiency suppression and spatial spillover effect: a quasi-natural experiment based on China’s environmental protection tax law. Environ Dev Sustain (2023). https://doi.org/10.1007/s10668-023-04146-4
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DOI: https://doi.org/10.1007/s10668-023-04146-4