Assessing the synergistic reduction effects of Environmental Protection Tax and Environmental Protection Subsidy in China

Abstract

Abstract Under the goal of achieving green transformation and upgrading the economy and society, it is of great practical significance to study environmental protection tax, environmental protection subsidy and carbon emission intensity of enterprises. Based on the data of A-share listed companies in China from 2009 to 2020, this paper empirically investigates the impact of environmental taxes and subsidies on the carbon emission intensity of enterprises. The results show that: (i) The single effect of environmental protection tax, and the synergistic effect with environmental subsidies effectively curb the carbon emission intensity of enterprises. (ii) The synergistic effect can suppress the carbon emission intensity of enterprises by enhancing the level of green innovation. (iii) The synergistic effect effectively suppresses the carbon emission intensity of non-high-tech industries, large enterprises, and east-central enterprises. The above findings not only enrich the literature related to carbon emission intensity but also provide useful insights for the government to study how to use environmental protection tax and environmental protection subsidy to curb carbon intensity and provide references on how to implement policies.