ORIGINAL RESEARCH article
Front. Environ. Sci.
Sec. Environmental Policy and Governance
Volume 13 - 2025 | doi: 10.3389/fenvs.2025.1602644
Research on the Dual Effects of Environmental Protection Tax Law on Green Transformation of China's Industry
Provisionally accepted
- School of Economics and Commerce, Zhongshan Institute, University of Electronic Science and Technology of China, Zhongshan, China
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Based on balanced panel data from 286 prefecture-level cities across 30 provinces in China spanning 2013-2023, this study employs an intensity difference-in-differences model to systematically evaluate the promoting effect of environmental tax policies on industrial green transformation. It further investigates heterogeneous impact characteristics and underlying mechanisms. Empirical results demonstrate that the implementation of environmental tax policies significantly reduces industrial pollution emission intensity while simultaneously promoting growth in industrial value-added, achieving a "double dividend" effect of both environmental protection and economic growth. This conclusion remains robust after a series of rigorous tests and the exclusion of interference from other policies. Mechanism tests reveal that environmental tax policies primarily drive industrial green transformation through three channels:incentivizing enterprises to increase R&D investment, attracting high-quality foreign direct investment (FDI), and strengthening the efficiency of environmental tax collection and administration. Heterogeneity analysis indicates significant regional disparities in the "double dividend" effect, with it being pronounced only in the economically developed eastern region and the heavy industry-agglomerated northeastern region, while the pollution reduction effect in the central-western regions fell short of expectations. This paper provides crucial empirical evidence for refining environmental tax system design and implementing regionally differentiated environmental governance policies.
Keywords: Environmental tax, Industrial pollution emissions, Industrial output growth, technological innovation, Foreign direct investment, Tax administration, intensity difference-in-differences
Received: 30 Mar 2025; Accepted: 02 Jul 2025.
Copyright: © 2025 Zhao and Yuan. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Qing Zhao, School of Economics and Commerce, Zhongshan Institute, University of Electronic Science and Technology of China, Zhongshan, China
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