Spatial heterogeneity and driving forces of environmental productivity growth in China: Would it help to switch pollutant discharge fees to environmental taxes?

Emission charge policy has recently switched from pollutant discharge fees to environmental taxes in China. Considering spatial heterogeneity, the effects of changes in emission charge policy may subject to different Chinese regions. In this study, environmental efficiencies of Chinese regions are evaluated through provincial environmentally extended input-output tables and a frontier-based optimization model. Driving factors of environmental productivity growth are identified through global Luenberger productivity decomposition approach. Moreover, spatial heterogeneity on the effects of change in emission charge policy on environment and economy are assessed. Results show that all regions experienced environmental productivity growth. Technology progress is the major driving factor in most regions with an average contribution of 90%, while technical efficiency regress slows environmental productivity growth in Southwest region. Switching from pollutant discharge fees to environmental taxes would decreases emission intensities by 1.42% on average, but it would have different negative impact on economic growth (-1.13%~-4.90% of regional GDP) due to spatially heterogeneous trade-offs between environmental protection and economic development. Addressing such spatial heterogeneity provide not only a basis for diversified tax rate determination but also a framework for other environmental policy assessment.