The Regulatory Effect of Government Fiscal Intervention on Carbon Reduction—A System Analysis Based on Economy–Energy–Environment

Jing Ye and Lixin Tian ()
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Jing Ye: Research Institute of Carbon Neutralization Development, School of Mathematical Sciences, Jiangsu University, Zhenjiang 212013, China
Lixin Tian: Research Institute of Carbon Neutralization Development, School of Mathematical Sciences, Jiangsu University, Zhenjiang 212013, China

Sustainability, 2025, vol. 17, issue 7, 1-36

Abstract: In the process of achieving carbon neutrality, the role of government fiscal intervention is becoming more prominent. This article is based on the DPSIRM theoretical model and constructs a comprehensive evaluation index system for economic growth, energy transformation, and environmental improvement, using an improved entropy method for evaluation. Subsequently, we examined the impact of the economic, energy, and environmental systems on carbon emission reduction under the threshold effect of government fiscal intervention. The results indicate that (1) the economic development and carbon emissions in Jiangsu Province show a U-shaped trend of first decreasing and then increasing, while the energy transformation shows a positive inverted U-shaped trend of first increasing and then decreasing. Environmental improvement significantly reduces carbon emissions. (2) Government fiscal intervention has a significant impact on local carbon reduction, which is known as the regulatory effect of fiscal intervention. Specifically, with the increasing degree of government fiscal intervention, energy transformation, economic growth, and environmental improvement have promoted carbon emission reduction to varying degrees, and their impact mechanisms exhibit differentiated marginal effect characteristics. Among them, the marginal effect of energy transformation on carbon reduction increases, while the marginal effect of economic growth and environmental improvement decreases.

Keywords: government fiscal intervention; threshold effects model; carbon neutrality; economic growth; energy transformation; environmental improvement (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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