Government Environmental Expenditure, Budget Management, and Regional Carbon Emissions: Provincial Panel Data from China

Abstract

To explore the impact of government fiscal intervention on regional carbon emissions, this paper employs a two-way fixed-effects model to analyze data from 30 provinces in China, spanning the period from 2008 to 2017. This study investigates the effects of local government environmental expenditure and government budget on the per capita volume, intensity, and performance of regional carbon emissions. The results show that government environmental expenditure is beneficial to reducing regional carbon emissions and improving regional carbon emission performance. Second, the smaller the deviation between the government budget and final accounts, the more conducive it is to reducing carbon emissions. Third, we found that government environmental expenditure has the strongest inhibitory effect on regional carbon emissions in the eastern region, followed by the central region, and the weakest in the western region. Finally, government financial transparency positively moderates the inhibitory effect of government budget management on regional carbon emissions, that is, when fiscal transparency is high, the amplification effect of budget deviation on regional carbon emissions is weakened.