IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i23p10457-d1532362.html
   My bibliography  Save this article

Can the Environmental Protection Tax Promote the Improvement of Energy Efficiency? Evidence from Prefecture-Level City Data in China

Author

Listed:
  • Yuxin Ning

    (School of Economics and Management, Xi’an Shiyou University, Xi’an 710065, China)

  • Jifeng Duan

    (School of Economics and Management, Xi’an Shiyou University, Xi’an 710065, China)

Abstract

The environmental protection tax (EPT) implemented in 2018 is a significant measure in China’s tax system reform, providing a valuable opportunity to encourage green development, promote resource conservation, and advance sustainable growth. This study, based on panel data from Chinese prefecture-level cities between 2006 and 2021, uses the 2018 EPT as a quasi-natural experiment and applies the difference-in-differences (DID) model to empirically examine the impact of the EPT on urban energy efficiency. The results show that the EPT effectively enhances urban energy efficiency. Strengthening environmental law enforcement and promoting technological innovation are identified as key pathways to improving energy efficiency. Heterogeneity analysis reveals that the reform has a more significant impact on energy efficiency in southern cities compared to northern cities, and the effect is more pronounced in large cities than in smaller ones. This study enriches the existing literature on EPT and the application of institutional theory, providing empirical evidence for the effectiveness of the reform, highlighting the importance of enhancing local government environmental enforcement, and promoting technological innovation in improving energy efficiency. It offers valuable theoretical and practical guidance for policymakers, contributing to the low-carbon transition and the achievement of sustainable economic growth.

Suggested Citation

  • Yuxin Ning & Jifeng Duan, 2024. "Can the Environmental Protection Tax Promote the Improvement of Energy Efficiency? Evidence from Prefecture-Level City Data in China," Sustainability, MDPI, vol. 16(23), pages 1-24, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10457-:d:1532362
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/23/10457/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/23/10457/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Suyu Huang & Hanlian Lin & Yongjunbei Zhou & Haonan Ji & Naiping Zhu, 2022. "The Influence of the Policy of Replacing Environmental Protection Fees with Taxes on Enterprise Green Innovation—Evidence from China’s Heavily Polluting Industries," Sustainability, MDPI, vol. 14(11), pages 1-23, June.
    2. Wu, Haitao & Hao, Yu & Ren, Siyu, 2020. "How do environmental regulation and environmental decentralization affect green total factor energy efficiency: Evidence from China," Energy Economics, Elsevier, vol. 91(C).
    3. Shuai Shao, Zhenbing Yang, Lili Yang, and Shuang Ma, 2019. "Can China's Energy Intensity Constraint Policy Promote Total Factor Energy Efficiency? Evidence from the Industrial Sector," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    4. Shuai Shao & Zhenbing Yang & Lili Yang & Shuang Ma, 2019. "Can China’s Energy Intensity Constraint Policy Promote Total Factor Energy Efficiency? Evidence from the Industrial Sector," The Energy Journal, , vol. 40(4), pages 101-128, July.
    5. Costa-Campi, María Teresa & García-Quevedo, José & Segarra, Agustí, 2015. "Energy efficiency determinants: An empirical analysis of Spanish innovative firms," Energy Policy, Elsevier, vol. 83(C), pages 229-239.
    6. Li, Jiaman & Liu, Guixian & Dong, Jiajia, 2024. "Coordinated reduction effect of pollutant discharge fees on enterprises' pollutant and carbon emissions in China," Energy Economics, Elsevier, vol. 136(C).
    7. Song, Malin & Xie, Qianjiao & Shen, Zhiyang, 2021. "Impact of green credit on high-efficiency utilization of energy in China considering environmental constraints," Energy Policy, Elsevier, vol. 153(C).
    8. Wu, Haitao & Hao, Yu & Ren, Siyu & Yang, Xiaodong & Xie, Guo, 2021. "Does internet development improve green total factor energy efficiency? Evidence from China," Energy Policy, Elsevier, vol. 153(C).
    9. Manru Peng & Chendie Wei & Youliang Jin & Hangxin Ran, 2023. "Does the Environmental Tax Reform Positively Impact Corporate Environmental Performance?," Sustainability, MDPI, vol. 15(10), pages 1-19, May.
    10. Kong, Lingqian & Li, Zhaoyang & Liu, Biqian & Xu, Kai, 2024. "The impact of environmental protection tax reform on low-carbon total factor productivity: Evidence from China's fee-to-tax reform," Energy, Elsevier, vol. 290(C).
    11. Junmei Qi & Yi Song & Yijun Zhang, 2023. "Environmental Protection Tax and Energy Efficiency: Evidence from Chinese City-Level Data," Energies, MDPI, vol. 16(24), pages 1-24, December.
    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. Da Gao & Chang Liu & Xinyan Wei & Yang Liu, 2023. "Can River Chief System Policy Improve Enterprises’ Energy Efficiency? Evidence from China," IJERPH, MDPI, vol. 20(4), pages 1-17, February.
    2. Wang, Weilong & Yang, Xiaodong & Cao, Jianhong & Bu, Wenchao & Dagestani, Abd Alwahed & Adebayo, Tomiwa Sunday & Dilanchiev, Azer & Ren, Siyu, 2022. "Energy internet, digital economy, and green economic growth: Evidence from China," Innovation and Green Development, Elsevier, vol. 1(2).
    3. Tao Ma & Xiaoxi Cao, 2022. "FDI, technological progress, and green total factor energy productivity: evidence from 281 prefecture cities in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(9), pages 11058-11088, September.
    4. Chunji Zheng & Feng Deng & Chengyou Li, 2022. "Energy-Saving Effect of Regional Development Strategy in Western China," Sustainability, MDPI, vol. 14(9), pages 1-22, May.
    5. Li, Xiaosheng & Wang, Ruirui & Shen, Z.Y. & Song, Malin, 2023. "Green credit and corporate energy efficiency: Enterprise pollution transfer or green transformation," Energy, Elsevier, vol. 285(C).
    6. Ran, Qiying & Yang, Xiaodong & Yan, Hongchuan & Xu, Yang & Cao, Jianhong, 2023. "Natural resource consumption and industrial green transformation: Does the digital economy matter?," Resources Policy, Elsevier, vol. 81(C).
    7. Yu, Rong & Li, Jianhong, 2024. "Does fintech influence sustainable development under natural resource constraints: insights from 270 Chinese cities," Resources Policy, Elsevier, vol. 91(C).
    8. Ren, Siyu & Hao, Yu & Wu, Haitao, 2022. "The role of outward foreign direct investment (OFDI) on green total factor energy efficiency: Does institutional quality matters? Evidence from China," Resources Policy, Elsevier, vol. 76(C).
    9. Yujian Jin & Lihong Yu & Yan Wang, 2022. "Green Total Factor Productivity and Its Saving Effect on the Green Factor in China’s Strategic Minerals Industry from 1998–2017," IJERPH, MDPI, vol. 19(22), pages 1-20, November.
    10. Yuxin Meng & Lu Liu & Jianlong Wang & Qiying Ran & Xiaodong Yang & Jianliang Shen, 2021. "Assessing the Impact of the National Sustainable Development Planning of Resource-Based Cities Policy on Pollution Emission Intensity: Evidence from 270 Prefecture-Level Cities in China," Sustainability, MDPI, vol. 13(13), pages 1-20, June.
    11. Haikuo Zhang & Chaobo Zhou, 2023. "Construction of the Pilot Free Trade Zone and Chinese Green Total Factor Energy Efficiency," Sustainability, MDPI, vol. 15(12), pages 1-13, June.
    12. Wu, Qingyang & Wang, Yanying, 2022. "How does carbon emission price stimulate enterprises' total factor productivity? Insights from China's emission trading scheme pilots," Energy Economics, Elsevier, vol. 109(C).
    13. Zhang, Qianxiang & Lin, Boqiang, 2024. "What does clean energy attract? Evidence from the transfer structure of energy-intensive projects in China," Renewable Energy, Elsevier, vol. 228(C).
    14. Otrachshenko, Vladimir & Hartwell, Christopher A. & Popova, Olga, 2023. "Energy efficiency, market competition, and quality certification: Lessons from Central Asia," Energy Policy, Elsevier, vol. 177(C).
    15. Wen, Yuyuan & Yu, Zilong & Xue, Jingjing & Liu, Yang, 2024. "How heterogeneous industrial agglomeration impacts energy efficiency subject to technological innovation:Evidence from the spatial threshold model," Energy Economics, Elsevier, vol. 136(C).
    16. Yu Hao & Yunxia Guo & Haitao Wu, 2022. "The role of information and communication technology on green total factor energy efficiency: Does environmental regulation work?," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 403-424, January.
    17. Zhou, Chaobo & Qi, Shaozhou, 2022. "Has the pilot carbon trading policy improved China's green total factor energy efficiency?," Energy Economics, Elsevier, vol. 114(C).
    18. Wen, Huwei & Liang, Weitao & Lee, Chien-Chiang, 2022. "Urban broadband infrastructure and green total-factor energy efficiency in China," Utilities Policy, Elsevier, vol. 79(C).
    19. Xue, Yan & Tang, Chang & Wu, Haitao & Liu, Jianmin & Hao, Yu, 2022. "The emerging driving force of energy consumption in China: Does digital economy development matter?," Energy Policy, Elsevier, vol. 165(C).
    20. Yu Hao & Jingwen Huang & Yunxia Guo & Haitao Wu & Siyu Ren, 2022. "Does the legacy of state planning put pressure on ecological efficiency? Evidence from China," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3100-3121, November.

    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:23:p:10457-:d:1532362. 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.