Can green fiscal policy improve green total factor carbon efficiency? Evidence from China

Ge Li and Xiaoyu Wang

Journal of Environmental Planning and Management, 2025, vol. 68, issue 14, 3508-3537

Abstract: Green fiscal policy has emerged as a crucial tool for promoting sustainable development in developing countries. The “National Comprehensive Demonstration City of Energy Conservation and Emission Reduction Fiscal Policy” (ECER fiscal policy) launched by the Chinese government in 2011 is a typical green fiscal policy, but its effect remains to be evaluated. This study measures the green total factor carbon efficiency (GTFCE) of Chinese cities from 2004 to 2019 and employs a time-varying difference-in-differences (DID) model to assess the causal effect of the ECER fiscal policy on GTFCE. The findings suggest that the ECER fiscal policy, combining financial incentives and environmental regulation attributes, can effectively enhance GTFCE in pilot cities. Mechanism analysis demonstrates that the low-carbon effect of the ECER fiscal policy is mainly through optimizing resource allocation and facilitating green innovation. Heterogeneity analysis further highlights the policy’s amplified impact in cities with officials under 54 years old and higher environmental attention from local governments. These findings offer valuable insights for policymakers in developing countries regarding fiscal policy optimization in advancing carbon reduction.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09640568.2024.2352554 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jenpmg:v:68:y:2025:i:14:p:3508-3537

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CJEP20

DOI: 10.1080/09640568.2024.2352554

Access Statistics for this article

Journal of Environmental Planning and Management is currently edited by Dr Neil Powe, Dr Ken Willis and George Bill Page

More articles in Journal of Environmental Planning and Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().