Environmental stringency policy shocks and environmental tax have become fundamental policy tools for mitigating the degradation of the environment. The study explores the effects of environmental tax and environmental stringency policy shocks in the reduction of pollution emissions in China for the time 1993 to 2019. This study is a pioneer in assessing the simultaneous impact of these two policy instruments on pollution emissions in China. For empirical investigation, the study employed NARDL estimation techniques. The NARDL results show that positive shocks in environmental tax reduce N2O emissions by 0.03%, PM2.5 emissions by 0.13%, CO
2
emissions by 0.18%, and GHGs emissions by 0.01%, however, negative shocks in environmental tax increase N
2
O emissions by 0.01%, PM2.5 emissions by 0.07%, CO
2
emissions by 0.28%, GHGs emissions by 0.17% in the long run. The long-run results also show that positive shocks in environmental policy stringency reduced CO
2
emissions by 0.94%, GHGs emissions by 0.77%, while negative shocks in environmental policy stringency increased N
2
O emissions by 0.17%, PM2.5 emissions by 0.50%, CO
2
emissions by 0.63%. The findings suggest vigorous policy implications.
Environmental stringency policy shocks and air pollution tax have become fundamental policy tools for mitigating degradation of the environment but there are very limited studies available assessing their simultaneous effect in combating pollution emissions, especially in China. The study considers this gap by exploring the simultaneous effects of air pollution tax and environmental stringency policy shocks in the reduction of pollution emissions in China for the time 1993 to 2019. This study is a pioneer in assessing the simultaneous impact of these two policy instruments on pollution emissions in China. For empirical investigation, the study employed ARDL and NARDL estimation techniques. The long-run outcomes of ARDL reveal that environmental tax and environmental stringency policy results in mitigating pollution emissions. The results of NARDL show that positive shocks in environmental tax and environmental policy stringency result in alleviating pollution emissions, however, negative shocks in both policy instruments result in increasing pollution emissions in the long-run.
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