IDEAS home Printed from https://ideas.repec.org/a/bla/chinae/v27y2019i1p72-92.html
   My bibliography  Save this article

Taxation and the Environment–Health–Poverty Trap: A Policy Experiment Perspective

Author

Listed:
  • Sumei Chen
  • Ling‐Yun He

Abstract

Under pressures related to economic growth and environmental protection, China is facing an increasingly severe “environment–health–poverty” trap risk. Fuel taxation is generally considered an effective policy to counter such a risk. Since 2009 China has raised the fuel tax rate many times to enhance tax reform. However, the effects of this policy remain unknown. Therefore, it is vitally important to estimate the impacts of China's current fuel taxation policy on environment, public health and the national economy. As the first attempt in existing literature on China, this paper builds a general equilibrium framework with the feedback effect of public health on economy. We find that that the fuel tax policy benefits the adjustment of the economic structure and improves human health; however, it is detrimental to economic growth, public welfare and price stability. In this sense, it plays a limited role in reducing the trap risk and might not be sustainable in the long term.

Suggested Citation

  • Sumei Chen & Ling‐Yun He, 2019. "Taxation and the Environment–Health–Poverty Trap: A Policy Experiment Perspective," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 27(1), pages 72-92, January.
    • Handle: RePEc:bla:chinae:v:27:y:2019:i:1:p:72-92
    DOI: 10.1111/cwe.12268
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/cwe.12268
    Download Restriction: no
    File URL: https://libkey.io/10.1111/cwe.12268?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Chen, Su-Mei & He, Ling-Yun, 2014. "Welfare loss of China's air pollution: How to make personal vehicle transportation policy," China Economic Review, Elsevier, vol. 31(C), pages 106-118.
    2. Sterner, Thomas, 2007. "Fuel taxes: An important instrument for climate policy," Energy Policy, Elsevier, vol. 35(6), pages 3194-3202, June.
    3. Shen, Junyi, 2006. "A simultaneous estimation of Environmental Kuznets Curve: Evidence from China," China Economic Review, Elsevier, vol. 17(4), pages 383-394.
    4. Allan, Grant & Lecca, Patrizio & McGregor, Peter & Swales, Kim, 2014. "The economic and environmental impact of a carbon tax for Scotland: A computable general equilibrium analysis," Ecological Economics, Elsevier, vol. 100(C), pages 40-50.
    5. Guo, Xiaoqi & Haab, Timothy C. & Hammitt, James K., 2006. "Contingent Valuation and the Economic Value of Air-Pollution-Related Health Risks in China," 2006 Annual meeting, July 23-26, Long Beach, CA 21366, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Joshua Graff Zivin & Matthew Neidell, 2012. "The Impact of Pollution on Worker Productivity," American Economic Review, American Economic Association, vol. 102(7), pages 3652-3673, December.
    7. Nam, Kyung-Min & Selin, Noelle E. & Reilly, John M. & Paltsev, Sergey, 2010. "Measuring welfare loss caused by air pollution in Europe: A CGE analysis," Energy Policy, Elsevier, vol. 38(9), pages 5059-5071, September.
    8. Quah, Euston & Boon, Tay Liam, 2003. "The economic cost of particulate air pollution on health in Singapore," Journal of Asian Economics, Elsevier, vol. 14(1), pages 73-90, February.
    9. Liu, Gordon G. & Dow, William H. & Fu, Alex Z. & Akin, John & Lance, Peter, 2008. "Income productivity in China: On the role of health," Journal of Health Economics, Elsevier, vol. 27(1), pages 27-44, January.
    10. James Hammitt & Ying Zhou, 2006. "The Economic Value of Air-Pollution-Related Health Risks in China: A Contingent Valuation Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 33(3), pages 399-423, March.
    11. Fang Cai & Meiyan Wang, 2006. "Challenge Facing China's Economic Growth in Its Aging but not Affluent Era," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(5), pages 20-31, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chen, Su-Mei & He, Ling-Yun, 2014. "Welfare loss of China's air pollution: How to make personal vehicle transportation policy," China Economic Review, Elsevier, vol. 31(C), pages 106-118.
    2. Ziebarth, Nicolas R. & Schmitt, Maike & Karlsson, Martin, 2013. "The Short-Term Population Health Effects of Weather and Pollution: Implications of Climate Change," IZA Discussion Papers 7875, Institute of Labor Economics (IZA).
    3. Brajer, Victor & Mead, Robert W. & Xiao, Feng, 2008. "Health benefits of tunneling through the Chinese environmental Kuznets curve (EKC)," Ecological Economics, Elsevier, vol. 66(4), pages 674-686, July.
    4. Sheng Yang & Ling-Yun He, 2015. "Oil price shocks, road transport pollution emissions and residents' health losses in China," Papers 1512.01742, arXiv.org.
    5. Bangzhu Zhu & Runzhi Pang & Julien Chevallier & Yi-Ming Wei & Dinh-Tri Vo, 2019. "Including intangible costs into the cost-of-illness approach: a method refinement illustrated based on the PM2.5 economic burden in China," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(4), pages 501-511, June.
    6. HE, Ling-Yun & QIU, Lu-Yi, 2016. "Transport demand, harmful emissions, environment and health co-benefits in China," Energy Policy, Elsevier, vol. 97(C), pages 267-275.
    7. Lu-Yi Qiu & Ling-Yun He, 2018. "Bike Sharing and the Economy, the Environment, and Health-Related Externalities," Sustainability, MDPI, vol. 10(4), pages 1-10, April.
    8. George Parsons & Kelley Myers, 2017. "Fat tails and truncated bids in contingent valuation: an application to an endangered shorebird species," Chapters, in: Daniel McFadden & Kenneth Train (ed.), Contingent Valuation of Environmental Goods, chapter 2, pages 17-42, Edward Elgar Publishing.
    9. Xiya Zhang & Haibo Hu, 2019. "Combining Data from Multiple Sources to Evaluate Spatial Variations in the Economic Costs of PM 2.5 -Related Health Conditions in the Beijing–Tianjin–Hebei Region," IJERPH, MDPI, vol. 16(20), pages 1-17, October.
    10. Brian Chi-ang Lin & Siqi Zheng & Eleftherios Giovanis & Oznur Ozdamar, 2016. "Structural Equation Modelling And The Causal Effect Of Permanent Income On Life Satisfaction: The Case Of Air Pollution Valuation In Switzerland," Journal of Economic Surveys, Wiley Blackwell, vol. 30(3), pages 430-459, July.
    11. Li, Zhengtao & Hu, Bin, 2018. "Perceived health risk, environmental knowledge, and contingent valuation for improving air quality: New evidence from the Jinchuan mining area in China," Economics & Human Biology, Elsevier, vol. 31(C), pages 54-68.
    12. HE Ling-Yun & OU Jia-Jia, 2016. "Taxing sulphur dioxide emissions: A policy evaluation from public health perspective in China," Energy & Environment, , vol. 27(6-7), pages 755-764, November.
    13. Gupta, Monika, 2016. "Willingness to pay for carbon tax: A study of Indian road passenger transport," Transport Policy, Elsevier, vol. 45(C), pages 46-54.
    14. Khuc, Quy Van & Nong, Duy & Phu Vu, Tri, 2022. "To pay or not to pay that is the question - for air pollution mitigation in a world’s dynamic city: An experiment in Hanoi, Vietnam," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 687-701.
    15. Ling-Yun He & Sheng Yang & Dongfeng Chang, 2017. "Oil Price Uncertainty, Transport Fuel Demand and Public Health," IJERPH, MDPI, vol. 14(3), pages 1-19, March.
    16. Anthony Boardman & Jeff Geng & Bruno Lam, 2020. "The Social Cost of Informal Electronic Waste Processing in Southern China," Administrative Sciences, MDPI, vol. 10(1), pages 1-20, February.
    17. Zhang, Hui & Zhang, Bing, 2020. "The unintended impact of carbon trading of China's power sector," Energy Policy, Elsevier, vol. 147(C).
    18. Loría, Luis Enrique & Watson, Verity & Kiso, Takahiko & Phimister, Euan, 2019. "Investigating users' preferences for Low Emission Buses: Experiences from Europe's largest hydrogen bus fleet," Journal of choice modelling, Elsevier, vol. 32(C), pages 1-1.
    19. Lars Hein & Pete Roberts & Lucia Gonzalez, 2016. "Valuing a Statistical Life Year in Relation to Clean Air," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 18(04), pages 1-24, December.
    20. Raut, Nirmal Kumar & Shrestha, Devendra Prasad, 2011. "Why Low Adult Immunization? An inquiry into the case of Hepatitis B Vaccine in the Peri-Urban Areas of Kathmandu Valley," MPRA Paper 61711, University Library of Munich, Germany, revised Jan 2015.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:chinae:v:27:y:2019:i:1:p:72-92. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iwepacn.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.