Government fiscal decentralization and haze and carbon reduction: Evidence from the fiscal Province-Managing-County reform

Abstract

Government governance reform is not only a vital motivation for high economic quality but also an important factor in stimulating the government's environmental governance responsibility. The article empirically examines the fiscal Province-Managing-County (PMC) pilot reform on the synergic governance of haze and carbon reduction and its mechanism. The results show that the policy helps to realize the synergic governance of haze and carbon reduction, and the reform of fiscal Province-Managing-County promotes regional haze and carbon reduction mainly through structural effect, innovation effect, and fiscal expenditure responsibility effect. The heterogeneity analysis shows that the policy has an asymmetric effect on haze and carbon reduction under different administrative structures, economic structures and levels of government intervention. Further analysis shows a policy linkage effect between this policy and the Green Fiscal Policy. The policy has the situation of blood-sucking in the provincial capital city and leads to an increase in financial funds. The above results prove that the policy can help to realize haze and carbon reduction and provide practical ideas for the further expansion of the policy. At the same time, it provides the direction for the local government to realize the double-carbon goal.