Green tax system and corporate carbon emissions - a quasi-natural experiment based on the environmental protection tax law

• Published in: Journal of environmental planning and management Vol. 68; no. 9; pp. 2092 - 2122
• Main Authors: Xu, Wei, Li, Mingzhu
• Format: Journal Article
• Language: English
• Published: Routledge 29.07.2025
• Subjects: carbon; China; corporate carbon emissions; difference-in-differences model; economic development; environmental governance; environmental protection; environmental protection tax law; green tax system; public ownership; sustainable technology; China
• ISSN: 0964-0568; 1360-0559; 1360-0559
• DOI: 10.1080/09640568.2024.2307524

The green tax system is an important tool for the government to coordinate the contradiction between economic development and environmental governance using fiscal instruments, and green tax reform can play a regulatory role in carbon emissions. This study analyzes the impact of the green tax system on carbon emissions of industrial enterprises by using the difference-in-differences model based on panel data for A-share listed industrial enterprises from 2014-2021 in China. The results show that: (1) Environmental Protection Tax Law significantly reduces corporate carbon emissions; (2) Among state-owned and heavy polluting industrial enterprises, enterprises with low financing constraints and a high degree of regional marketization, this negative effect is more pronounced; (3) Environmental Protection Tax Law motivates enterprises to implement carbon emission reduction activities through two paths: increased environmental protection investment and improved green innovation, thus promoting the transition to low-carbon development.