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The effects of green finance, environmental tax and industrial ecologicalization towards carbon neutrality targets in China: evidence from autoregressive distributed lag-error correction model

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  • Duyun Peng

    (Jiangxi University of Finance and Economics
    Ritsumeikan University)

  • Xiaoyu Liu

    (Jiangxi University of Finance and Economics)

  • Koji Shimada

    (Ritsumeikan University)

Abstract

A quite efficient tool to tackle climate change is green finance. By applying autoregressive distributed lag-error correction model to analyze 2011–2019 provincial data in China, this study investigated how green finance influences carbon neutrality targets, while taking considerations of industrial ecologicalization and environmental tax to thoroughly analyze interactions in the long term as well as the short term. Research outcomes indicated that, throughout the research period, green finance had greatly improved and that the measuring system was appropriate. The outcomes also demonstrated that the error correction coefficient matches the predicted adverse effect. While long-term reductions in carbon emissions per capita were significantly impacted by green finance and industrial ecologicalization. The short-term estimation’s findings, nevertheless, confirmed that environmental taxes considerably reduced carbon emissions per capita. However, it was shown that environmental taxes had a negligible long-term impact on air pollution emissions. Meanwhile, green finance and industry ecologicalization showed a significant short-term impact.

Suggested Citation

  • Duyun Peng & Xiaoyu Liu & Koji Shimada, 2024. "The effects of green finance, environmental tax and industrial ecologicalization towards carbon neutrality targets in China: evidence from autoregressive distributed lag-error correction model," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(10), pages 26237-26261, October.
    • Handle: RePEc:spr:endesu:v:26:y:2024:i:10:d:10.1007_s10668-023-03726-8
    DOI: 10.1007/s10668-023-03726-8
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