The impact of fiscal decentralization on CO2 emissions in China

Cheng, Shulei; Fan, Wei; Chen, Jiandong; Meng, Fanxin; Liu, Gengyuan; Song, Malin; Yang, Zhifeng

doi:10.1016/j.energy.2019.116685

Cited by 119 publications

(69 citation statements)

References 38 publications

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“…For instance, Bodman, Campbell, Heaton, and Hodge (2009) estimated the impact of fiscal decentralization on output in Australia. Cheng et al (2020) utilized the nonlinear term of fiscal decentralization in his model for China and used the decomposition methods to explain the changes in CO 2 emission along with the fixed‐effect method and dynamic GMM methods. Similarly, Chen and Liu (2020) examined the role of fiscal decentralization on index constructed for environmental pollution and analyzed the spatial distribution of environmental pollution.…”

Section: Literature Reviewmentioning

confidence: 99%

“…To sum up, the importance of fiscal decentralization in explaining different macroeconomic activities is well documented in the literature (Roche et al, 2018). Moreover, research is also carried out to investigate the effects of fiscal decentralization on environmental sustainability (Chen & Liu, 2020; Cheng et al, 2020; Cutter & DeShazo, 2007; Kunce & Shogren, 2008; Liang & Yang, 2019). However, the nexus between fiscal decentralization and environmental sustainability is inconclusive, and we summarize the related studies on the testing of a race to the top or bottom hypothesis in Table 1.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Hence, it is significant to analyze the nexus between fiscal decentralization and CO 2 emission for the selected countries. The most recent studies that explore the role of fiscal decentralization on environmental pollution and other dependent variables include He (2015), K. Zhang, Zhang, and Liang (2017), Roche et al (2018), Elheddad, Djellouli, Tiwari, and Hammoudeh (2020), and Cheng et al (2020), to name a few. The panel data growth regression in our study is different from these existing studies, due to the inclusion of decisive explanatory variables, for example, the eco‐innovation and renewable energy consumption.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Does fiscal decentralization and eco‐innovation promote sustainable environment? A case study of selected fiscally decentralized countries

Umar

Ali

et al. 2020

Sustainable Development

171

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This study highlights the importance of fiscal decentralization in promoting a sustainable environment. The literature on the importance of fiscal decentralization in affecting environmental quality is scant, and thus, this study attempts to fill the gap by incorporating the linear and nonlinear terms of fiscal decentralization as possible determinants for CO2 emissions. Particularly, we utilize data from seven highly fiscally decentralized countries, that is, Australia, Austria, Belgium, Canada, Germany, Spain, and Switzerland, over the period 1990–2018. For empirical analysis, advanced panel data econometric tools are used that can deal with both heterogeneous coefficients and dependence of cross‐sections. The findings confirm that linear and nonlinear terms of fiscal decentralization improve the environment by reducing CO2 emissions. Moreover, gross domestic product (GDP) increases, while eco‐innovation and renewable energy usage reduce CO2 emissions. This study recommends that any policy that targets green growth will affect CO2 emissions. Moreover, policies targeting fiscal decentralization, GDP, eco‐innovation, and renewable energy will play the role in more than 1 year, namely in the long run.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Does fiscal decentralization and eco‐innovation promote sustainable environment? A case study of selected fiscally decentralized countries

Umar

Ali

et al. 2020

Sustainable Development

171

View full text Add to dashboard Cite

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“…Only when the local fiscal expenditures reach a certain level will local governments consider improving energy efficiency while pursuing economic development. China seeks to steadily improve energy efficiency in the future, and this plan depends to a large extent on whether fiscal decentralisation regulates the energy-saving and emission-reducing effects of the industrial structure well (Cheng et al, 2020). Under the fiscal tax sharing system, this outcome is also related to the local government's ability to perform resource allocation.…”

Section: Spatial Regression Resultsmentioning

confidence: 99%

“…Bevan (2003) noted that developing regions that are unusually well endowed with natural resources often seem to derive little benefit from their apparent good fortune. Cheng et al (2020) indicated that the implementation of local energy-saving and emissions-reducing policies might not achieve the desired effect, especially in developing regions. These areas tend to neglect the emissions reduction targets set by the central government.…”

Section: Spatial Regression Resultsmentioning

confidence: 99%

Can fiscal decentralisation regulate the impact of industrial structure on energy efficiency?

Wang

Hua

et al. 2020

Economic Research-Ekonomska Istraživanja

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This study applies the slack-based measure-data envelopment analysis (SBM-DEA) method to measure energy efficiency and tests the spatial spill-over effects of fiscal decentralisation, industrial structure and energy efficiency using the spatial Durbin model. The results show that China's energy efficiency presents a clear geographical step distribution, and the Eastern and Western regions have higher energy efficiency than the Central region. Fiscal decentralisation has a positive effect on the energy efficiency of the Eastern and Central regions by upgrading the industrial structure. In addition, fiscal decentralisation has significant, positive externalities on the surrounding areas, promoting environmental protection and energy conservation in all regions of China. The results are in line with the tenets of environmental federalism (Oates & Schwab): through the allocation and transfer of industrial factors, fiscal decentralisation affects energy governance. Therefore, local governments should formulate policies and targets according to their regions' different economic development levels, and the Central and Western areas, which have greater space for improvement and low energy efficiency, should receive attention to balance regional differences.

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Composite fiscal decentralisation and green innovation: Imperative strategy for institutional reforms and sustainable development in OECD countries

Sun

Razzaq

2022

Sustainable Development

108

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Improving environmental quality and fiscal management has become one of the utmost imperative policy agendas for sustainable development. Although many studies explore multiple deriving factors of environmental sustainability; however, very little is known regarding the impact of composite (revenue and expenditure) fiscal decentralisation (FD) on environmental quality. Manifestly, the intergovernmental fiscal relations advocate to ensure the alignment of tax and spending powers to promote sustainable and inclusive growth. Therefore, we explore the asymmetric linkages between composite FD, green innovation, institutional governance and carbon emissions in 32 OECD countries. Our preliminary results confirm non‐linearity and structural changes in data, which instigate us to apply the asymmetric method of moments quantile regression. The overall findings exhibit that composite FD significantly mitigates carbon emissions only at medium to higher (5th–9th) emissions quantiles. In contrast, green innovation reduces carbon emissions from lower to medium (1st–5th) emissions quantiles. Institutional reforms promote environmental sustainability across all emissions quantiles (1st–9th). Interestingly, the emissions‐reducing effect of composite FD, green innovation and institutional governance is highest for higher emissions quantiles and lowest for lower emissions quantiles. These results provide valuable policy recommendations for all stakeholders.

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The impact of fiscal decentralization on CO2 emissions in China

Cited by 119 publications

References 38 publications

Does fiscal decentralization and eco‐innovation promote sustainable environment? A case study of selected fiscally decentralized countries

Does fiscal decentralization and eco‐innovation promote sustainable environment? A case study of selected fiscally decentralized countries

Can fiscal decentralisation regulate the impact of industrial structure on energy efficiency?

Composite fiscal decentralisation and green innovation: Imperative strategy for institutional reforms and sustainable development in OECD countries

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