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A way toward green economic growth: Role of energy efficiency and fiscal incentive in China

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  • Yuan, Shengyun
  • Li, Changhao
  • Wang, Mingyang
  • Wu, Hao
  • Chang, Lei

Abstract

China faces the challenge of balancing economic development with environmental sustainability as one of the largest economies and the world’s top emitter of greenhouse gases. This study investigates the role of fiscal incentives and energy efficiency in fostering green economic growth in China. The Data Envelopment Analysis (DEA) model is used in the analysis, which spans the years 2010 to 2021, to assess the effectiveness of energy use and the influence of financial incentives on environmental sustainability. The results show that increasing energy efficiency reduces environmental deterioration and improves resource utilization, positively contributing to green economic growth. The study also demonstrates the critical role financial incentives, such as tax breaks and subsidies, play in encouraging investments in sustainable practices and clean technology development. These results underline how crucial it is to implement targeted fiscal policies and energy efficiency measures to promote green economic growth in China.

Suggested Citation

  • Yuan, Shengyun & Li, Changhao & Wang, Mingyang & Wu, Hao & Chang, Lei, 2023. "A way toward green economic growth: Role of energy efficiency and fiscal incentive in China," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 599-609.
    • Handle: RePEc:eee:ecanpo:v:79:y:2023:i:c:p:599-609
    DOI: 10.1016/j.eap.2023.06.004
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