Evidence from China's shipping sector on the impact of fiscal measures in enabling a low-carbon economic transition

Abstract

The Green Economy Initiative aims to achieve economic development while minimizing carbon emissions by implementing a low-carbon economy across all sectors. It is noteworthy that ships play a significant role in global commodity transportation, accounting for approximately 80–90 percent. However, this also leads to a surge in fossil fuel consumption and alarming pollution levels. The data utilized in this article spans from 2010 to 2022 and specifically focuses on the shipping industry, drawing from information collected in 20 different provinces of China. Multiple panel regression models were constructed to analyze the influence of fiscal policies on facilitating the transition toward a low-carbon economy. In addition, a vector autoregression model was employed to examine the interconnected dynamics between low-carbon transition and budgetary guidelines. The findings indicate that tax-based policies demonstrate an inverted U-shaped relationship with low-carbon transition, whereas transfer payment policies exhibit an N-shaped pattern. The shipping sector is actively embracing low-carbon practices, largely due to incorporating digital technologies that mitigate the adverse impacts of fiscal regulations.