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How does environmental regulation affect the double dividend for energy firms? Evidence from China’s EPT policy

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  • Deng, Youyi
  • Dong, Kangyin
  • Taghizadeh-Hesary, Farhad
  • Xue, Jinjun

Abstract

Changes in international markets and strict environmental regulations have challenged Chinese energy companies to reconcile sustainable and low-carbon development. Therefore, this paper focuses on 296 energy firms in China from 2011 to 2021 and uses the Difference-in-Differences (DID) method to explore the impact of China’s environmental protection tax (EPT) reform on the dual dividend of energy firms from the perspective of resilience and CO2 emissions, and fully discusses the role of government subsidies and corporate social financing. This research finds that China’s EPT reform can improve the resilience of energy firms while reducing CO2 emissions, and thus bringing a double dividend to energy firms. At the same time, government subsidies can enhance the decarbonization effect of EPT reform, but excessive subsidies can reduce the resilience of firms. In addition, the EPT reform can expand the scale of social financing for energy firms, helping them to realize a double dividend. The study’s findings have important implications for the long-term low-carbon development of energy firms and provide a theoretical reference for China’s EPT reform.

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  • Deng, Youyi & Dong, Kangyin & Taghizadeh-Hesary, Farhad & Xue, Jinjun, 2023. "How does environmental regulation affect the double dividend for energy firms? Evidence from China’s EPT policy," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 807-820.
    • Handle: RePEc:eee:ecanpo:v:79:y:2023:i:c:p:807-820
    DOI: 10.1016/j.eap.2023.07.001
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    More about this item

    Keywords

    EPT reform; Energy firms; Double dividend; Government subsidies; Corporate social financing;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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