Assessment on the effectiveness of environmental regulation in China-evidence from a panel data analysis.

ABSTRACT

In the context of global warming and environmental deterioration, the environment impact assessment is a crucial institutional guaranty to assure less or no pollution during the process of the economic growth and rapid social development. This paper selected the environmental regulation system in China as a research target and assesses the effectiveness of green tax on the environment through an empirical analysis. The panel data from 2005 to 2015 in different cities in China are employed to analyze with a two-way fixed regression model; it analyzes the impact of environmental instruments like resource tax, excise tax, vehicle purchase tax, and pollutant discharge fees on environmental pollution and finds that the modeling conditions with green tax reform can lead to higher effect on environmental pollutant constrain but is distributed differently among east, central, and west based on the empirical analysis in China. Moreover, resource tax has a significant effect in the east and midwest of China. The effectiveness of excise tax on integrated pollution is not statistically significant. Compared with the midwest, eastern China's green tax had a much better performance on reducing environmental pollution. Pollutant discharge fees indicates a significant negative correlation to integrated pollution. The consumption of the other goods (like meat consumption) plays a mediating effect between vehicle purchase tax and integrated environmental pollution. In addition, the relevant policy recommendations are proposed against different tax types.