China's environmental tax reform achieves the co-management of carbon and haze: The role of optimizing energy utilization

Abstract

Environmental tax reform in China is an essential initiative to achieve carbon and haze co-management by shifting the Environmental Fee to Tax (EFT). Therefore, we employ a Coupling Coordination Degree (CCD) model to measure the level of carbon and haze co-management across three distinct scenarios in China. Treating the EFT policy as a quasi-natural experiment, the study explores its impact on carbon and haze co-management using data of 282 prefecture-level cities in China during 2015–2020. Furthermore, the study further analyzes the regional heterogeneity and the transmission mechanisms of optimizing energy utilization. The principal findings of this investigation are as follows. First, the co-management levels of carbon and haze in China show a discernible upward trend from 2015 to 2020. A heightened emphasis on carbon reduction is helpful in improving the co-management level of carbon and haze. Co-management levels of carbon and haze are lower within the treatment group compared to the control group, but their growth rates are higher. Second, the EFT policy in China has significantly enhanced the co-management level of carbon and haze. Third, the impact of China's EFT policy has a more pronounced effect in western China and a comparatively weaker effect in middle China, which may be attributed to variations in industrial infrastructure, supporting facilities, availability of clean energy resources, and prevailing policy inclinations across different regions of China. Finally, China's EFT policy is an instrumental factor in augmenting the co-management level of carbon and haze, primarily through pathways of upgrading energy structure and improving energy efficiency.