Carbon blessing or carbon curse? The role of fiscal policy

Chien-Chiang Lee (), Lixia Du and Chang-song Wang

Economic Analysis and Policy, 2024, vol. 83, issue C, 1097-1114

Abstract: Green development is the inevitable requirement of high-quality development in the resource-based regions, and it is also the fundamental guarantee for realizing environmental sustainability in the resource-based regions. Based on the panel data of 242 cities in China from 2006 to 2019, this paper explores whether mineral resource abundance is a blessing or a curse for carbon emission intensity and whether fiscal policy plays an intermediary role. We draw the following conclusions: (1) The overall performance of mineral resources is a carbon curse effect, because the carbon curse effect of mineral resources is greater than the carbon blessing effect. (2) Mechanism analysis reveals that the decrease in fiscal pressure and the increase in fiscal dependence are the formation paths of carbon blessing and carbon curse, respectively. (3) Heterogeneity analysis shows that the occurrence and intensity of the carbon curse are related to the level of local foreign investment, government intervention, and industrial diversification. The research results explain the supplementary motivation of government quality and provide Chinese evidence for the transformation and upgrading of resource-based regions.

Keywords: Mineral resource abundance; Carbon emission intensity; Fiscal pressure; Fiscal dependence (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:83:y:2024:i:c:p:1097-1114

DOI: 10.1016/j.eap.2024.08.012

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