IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i10p4141-d1395202.html
   My bibliography  Save this article

How Does Environmental Protection Tax Affect Urban Energy Consumption in China? New Insights from the Intensity Difference-in-Differences Model

Author

Listed:
  • Xianpu Xu

    (School of Business, Xiangtan University, Xiangtan 411105, China)

  • Lingyun Huang

    (School of Business, Xiangtan University, Xiangtan 411105, China)

Abstract

Against the backdrop of accelerating environmental protection and resource conservation, it is of great significance to achieve energy conservation and sustainable growth. In this context, by collecting panel data from 284 cities in China from 2009 to 2021, this paper constructs an intensity difference-in-differences (I-DID) model, using the implementation of China’s environmental protection law in 2018 as an event shock, to explore the impact of environmental protection tax (EPT) on urban energy consumption. The results indicate that EPT significantly reduces urban energy consumption. After several robustness tests, the estimation results shown above still hold. The mechanism test reveals that EPT mainly reduces energy consumption by promoting urban industrial upgrading, economic openness, and technological innovation. In addition, the heterogeneity test shows that EPT has a greater impact on energy consumption in central and western cities, small and medium-sized cities, non-resource-based cities, and non-old industrial bases. Therefore, to fully improve the positive effect of EPT on urban energy consumption, we suggest increasing energy efficiency, promoting the green transformation of energy structures, enhancing the ability to open-up and innovate, and improving a differentiated regional EPT management system.

Suggested Citation

  • Xianpu Xu & Lingyun Huang, 2024. "How Does Environmental Protection Tax Affect Urban Energy Consumption in China? New Insights from the Intensity Difference-in-Differences Model," Sustainability, MDPI, vol. 16(10), pages 1-26, May.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:10:p:4141-:d:1395202
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/10/4141/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/10/4141/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Xu, Yong & Li, Shanshan & Zhou, Xiaoxiao & Shahzad, Umer & Zhao, Xin, 2022. "How environmental regulations affect the development of green finance: Recent evidence from polluting firms in China," Renewable Energy, Elsevier, vol. 189(C), pages 917-926.
    2. Stefan Ambec & Mark A. Cohen & Stewart Elgie & Paul Lanoie, 2013. "The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 2-22, January.
    3. Abdullah, Sabah & Morley, Bruce, 2014. "Environmental taxes and economic growth: Evidence from panel causality tests," Energy Economics, Elsevier, vol. 42(C), pages 27-33.
    4. Blohmke, Julian & Kemp, René & Türkeli, Serdar, 2016. "Disentangling the causal structure behind environmental regulation," Technological Forecasting and Social Change, Elsevier, vol. 103(C), pages 174-190.
    5. Megan Heckert & Jeremy Mennis, 2012. "The Economic Impact of Greening Urban Vacant Land: A Spatial Difference-In-Differences Analysis," Environment and Planning A, , vol. 44(12), pages 3010-3027, December.
    6. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
    7. Alina Zaharia & Maria Claudia Diaconeasa & Laura Brad & Georgiana-Raluca Lădaru & Corina Ioanăș, 2019. "Factors Influencing Energy Consumption in the Context of Sustainable Development," Sustainability, MDPI, vol. 11(15), pages 1-28, August.
    8. Xianpu Xu & Yuchen Song, 2023. "Is There a Conflict between Automation and Environment? Implications of Artificial Intelligence for Carbon Emissions in China," Sustainability, MDPI, vol. 15(16), pages 1-22, August.
    9. Lee, Sanghoon & Oh, Dae-Won, 2015. "Economic growth and the environment in China: Empirical evidence using prefecture level data," China Economic Review, Elsevier, vol. 36(C), pages 73-85.
    10. Beattie, Graham & Ding, Iza & La Nauze, Andrea, 2022. "Is there an energy efficiency gap in China? Evidence from an information experiment," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    11. Mengxin Wang & Gaoke Liao & Yanling Li, 2021. "The Relationship between Environmental Regulation, Pollution and Corporate Environmental Responsibility," IJERPH, MDPI, vol. 18(15), pages 1-13, July.
    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. Yu, Wantao & Ramanathan, Ramakrishnan & Nath, Prithwiraj, 2017. "Environmental pressures and performance: An analysis of the roles of environmental innovation strategy and marketing capability," Technological Forecasting and Social Change, Elsevier, vol. 117(C), pages 160-169.
    2. Hassan, Mahmoud & Oueslati, Walid & Rousselière, Damien, 2020. "Environmental taxes, reforms and economic growth: an empirical analysis of panel data," Economic Systems, Elsevier, vol. 44(3).
    3. Alex Coad & Gianluca Biggi & Elisa Giuliani, 2021. "Asbestos, leaded petrol, and other aberrations: comparing countries’ regulatory responses to disapproved products and technologies," Industry and Innovation, Taylor & Francis Journals, vol. 28(2), pages 201-233, February.
    4. Dagestani, Abd Alwahed & Shang, Yuping & Schneider, Nicolas & Cifuentes-Faura, Javier & Zhao, Xin, 2023. "Porter in China: A quasi-experimental view of market-based environmental regulation effects on firm performance," Energy Economics, Elsevier, vol. 126(C).
    5. Zhang, Yijun & Song, Yi, 2022. "Tax rebates, technological innovation and sustainable development: Evidence from Chinese micro-level data," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    6. Jean Andrei & Mihai Mieila & Gheorghe H. Popescu & Elvira Nica & Manole Cristina, 2016. "The Impact and Determinants of Environmental Taxation on Economic Growth Communities in Romania," Energies, MDPI, vol. 9(11), pages 1-11, November.
    7. Weijia Zhuo, 2023. "Environmental regulation and corporate sustainability: Evidence from green innovation," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1723-1737, July.
    8. Huang, Youxing & Xu, Qi & Zhao, Yanping, 2021. "Short-run pain, long-run gain: Desulfurization investment and productivity," Energy Economics, Elsevier, vol. 102(C).
    9. Valeria Costantini & Francesco Crespi & Giovanni Marin & Elena Paglialunga, 2016. "Eco-innovation, sustainable supply chains and environmental performance in European industries," LEM Papers Series 2016/19, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    10. Harrison Hong & Ilan Kremer & Jeffrey D. Kubik & Jianping Mei & Michael Moses, 2015. "Ordering, revenue and anchoring in art auctions," RAND Journal of Economics, RAND Corporation, vol. 46(1), pages 186-216, March.
    11. Raúl Junior Sandoval-Gómez & Jesús Antonio Álvarez-Cedillo & Edgar Ivan Castellanos-Sanchez & Teodoro Álvarez-Sánchez & Rebeca Perez-Garcia, 2023. "Development of a technological innovation and social entrepreneurship training program to generate services in a Mexican public entity," Eastern-European Journal of Enterprise Technologies, PC TECHNOLOGY CENTER, vol. 6(13 (126)), pages 74-87, December.
    12. Angrisani, Marco & Atella, Vincenzo & Brunetti, Marianna, 2018. "Public health insurance and household portfolio Choices: Unravelling financial “Side Effects” of Medicare," Journal of Banking & Finance, Elsevier, vol. 93(C), pages 198-212.
    13. Matias Busso & Patrick Kline, 2008. "Do Local Economic Development Programs Work? Evidence from the Federal Empowerment Zone Program," Cowles Foundation Discussion Papers 1639, Cowles Foundation for Research in Economics, Yale University.
    14. Scott A. Imberman, 2011. "Achievement and Behavior in Charter Schools: Drawing a More Complete Picture," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 416-435, May.
    15. Hille, Erik & Althammer, Wilhelm & Diederich, Henning, 2020. "Environmental regulation and innovation in renewable energy technologies: Does the policy instrument matter?," Technological Forecasting and Social Change, Elsevier, vol. 153(C).
    16. David Card, 2022. "Design-Based Research in Empirical Microeconomics," American Economic Review, American Economic Association, vol. 112(6), pages 1773-1781, June.
    17. Alessandro Moro, 2021. "Can capital controls promote green investments in developing countries?," Temi di discussione (Economic working papers) 1348, Bank of Italy, Economic Research and International Relations Area.
    18. Vitaliy Roud & Thomas Wolfgang Thurner, 2018. "The Influence of State‐Ownership on Eco‐Innovations in Russian Manufacturing Firms," Journal of Industrial Ecology, Yale University, vol. 22(5), pages 1213-1227, October.
    19. Fang, Mingyue & Nie, Huihua & Shen, Xinyi, 2023. "Can enterprise digitization improve ESG performance?," Economic Modelling, Elsevier, vol. 118(C).
    20. Ichimura, Hidehiko & Todd, Petra E., 2007. "Implementing Nonparametric and Semiparametric Estimators," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 74, Elsevier.

    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:gam:jsusta:v:16:y:2024:i:10:p:4141-:d:1395202. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.