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The pollutant and carbon emissions reduction synergistic effect of green fiscal policy: Evidence from China

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  • Fan, Hongmin
  • Liang, Chen

Abstract

Green fiscal policy is an important tool for promoting environmental protection and low-carbon development.This paper adopts the “National Comprehensive Demonstration of Energy Saving and Emission Reduction Fiscal Policy” of China as a quasi-experiment and constructs a staggered DID model to explore the synergistic effect of green fiscal policy on the pollutant and carbon emissions reduction.The results indicate the following:(1) green fiscal policy can significantly reduce the pollutant and carbon emissions, and the effect is robust after a series of robustness tests;(2) green fiscal policy can contribute to environmental protection and low-carbon development primarily through weakening the local government's assessment of economic growth targets,stimulating industrial upgrading, and promoting green technology innovation;(3)Additionally, our results show that the synergistic effect is stronger in cities with low fiscal pressure and high inter-jurisdictional competition,and where local governments place a higher priority on environmental protection.

Suggested Citation

  • Fan, Hongmin & Liang, Chen, 2023. "The pollutant and carbon emissions reduction synergistic effect of green fiscal policy: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PB).
  • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323008188
    DOI: 10.1016/j.frl.2023.104446
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    3. Wei, Binhui & Zhao, Chunkai & Luo, Mingzhong, 2024. "Online markets, offline happiness: E-commerce development and subjective well-being in rural China," China Economic Review, Elsevier, vol. 87(C).
    4. Jinzhi Tong & Youyou Yang & Chunhua Zheng & Minglan Zheng, 2024. "Do Fiscal Incentives Contribute to Pollution Control? Empirical Evidence from China," Sustainability, MDPI, vol. 16(22), pages 1-21, November.

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