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Pursuing Cleaner Skies: A Study on the Impact of China’s Environmental Protection Tax Law on Haze Pollution

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  • Wuxin Zhang

    (School of Economics and Finance, Hohai University, Nanjing 211100, China)

  • Haiying Pan

    (School of Economics and Finance, Hohai University, Nanjing 211100, China)

Abstract

Haze pollution control is integral to green development, and fiscal and taxation policies are fundamental mechanisms supporting this effort. This study leverages the implementation of China’s Environmental Protection Tax (EPT) Law as a quasi-natural experiment to assess the impact and mechanisms of the greening of the tax system on haze pollution based on panel data from 281 prefecture-level cities in China from 2012 to 2021. The findings indicate that (1) the implementation of the EPT Law significantly reduces haze pollution, with results confirmed after a series of robustness tests; (2) the EPT Law controls haze pollution through promoting cleaner industrial structure, fostering green technological innovation, and strengthening the rigidity of environmental law enforcement; (3) fiscal decentralization enhances the inhibitory effect of the implementation of the EPT Law on haze pollution; (4) the haze-reduction effect of the EPT Law is especially notable in non-old industrial bases, areas with less pressure on officials’ promotions, and areas with higher public environmental awareness. This study not only enriches research on the policy effects of the EPT Law but also contributes to the environmental sustainable development goal of greening the tax system and continuously fighting for blue skies.

Suggested Citation

  • Wuxin Zhang & Haiying Pan, 2024. "Pursuing Cleaner Skies: A Study on the Impact of China’s Environmental Protection Tax Law on Haze Pollution," Sustainability, MDPI, vol. 16(24), pages 1-23, December.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:24:p:11095-:d:1546554
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    References listed on IDEAS

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