Role of Climate Policies and Environmental Regulations for Business Growth: Evidence from Sustainable Development Perspective

Abstract

This study aims to use updated data sets for China from 1990 to 2022 to study the relationship between business growth and environmental factors and regulations such as environmental policies, taxes, green technologies, and environmental revenues. The first study confirmed that none of the variables used was static in I(II), while the ADF and PP unit root tests proved that all variables were static at the level, and confirmed the first difference in the ARDL model. Results demonstrate that environmental taxes stimulate business growth, a phenomenon explained by the Porter Hypothesis, suggesting that effective regulations related to environment can spur innovation and efficiency. The significant influence of environmental revenues further illuminates the potential of the green economy. The findings underscore the need for governments and businesses to adopt stringent environmental regulations, promote green technologies, and exploit the burgeoning opportunities in the green economy. The interplay between environmental factors and business growth not only fosters economic prosperity (SDG 8) but also aids in combatting climate change and promoting sustainable industrialization (SDG 9, 13), offering a roadmap towards a sustainable future.