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The Green Effects of Industrial Policy—Evidence from China’s New Energy Vehicle Subsidies

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Listed:
  • Qian Cai

    (School of Economics and Management, Southeast University, Nanjing 211189, China
    National School of Development and Policy, Southeast University, Nanjing 211189, China)

  • Zheng Ji

    (School of Economics and Management, Southeast University, Nanjing 211189, China
    National School of Development and Policy, Southeast University, Nanjing 211189, China)

  • Fuxun Ma

    (Dong Fureng Economic and Social Development School, Wuhan University, Wuhan 430072, China)

  • Han Liang

    (Dong Fureng Economic and Social Development School, Wuhan University, Wuhan 430072, China)

Abstract

The development of new energy vehicles has become a common choice for countries worldwide to reduce greenhouse gas emissions and improve the global ecological environment, with China being no exception. However, challenges, such as finding charging stations, accessing residential areas, and highway charging, have hindered the green and high-quality growth of the new energy vehicle industry. This study, set against the backdrop of China’s 2018 policy to gradually redirect local purchase subsidy funds for new energy vehicles towards supporting the construction and operation of charging infrastructure, utilizes panel data from 282 prefecture-level cities from 2016 to 2021. A difference-in-differences model is constructed to compare the impact of infrastructure development on carbon emissions before and after the policy’s implementation. The study finds that policy has a negative effect on carbon emissions, especially in the second and third year after the policy’s implementation. Even after controlling for variables such as residents’ wealth levels, population size, environmental pollution, energy consumption, and government support, the results remain significant. Heterogeneity analysis reveals that the effect of the promotion of charging infrastructure on carbon emissions is greater in southern and central parts of China.

Suggested Citation

  • Qian Cai & Zheng Ji & Fuxun Ma & Han Liang, 2023. "The Green Effects of Industrial Policy—Evidence from China’s New Energy Vehicle Subsidies," Energies, MDPI, vol. 16(19), pages 1-16, September.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:19:p:6811-:d:1247683
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    References listed on IDEAS

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