Reduction Of Subsidies Research Articles

A game-theoretic framework for sustainable water allocation in agriculture: Enhancing economic and water efficiency in Akrotiri district (Cyprus).

Water scarcity is an escalating issue in Mediterranean countries, including Cyprus, where climate change, population growth, rapid urbanization, and economic development place significant pressure on water resources. This study focuses on optimizing the allocation of recycled water for agricultural use in the Akrotiri district, using a game theory approach to maximize net benefits (NB) associated with crop production by considering conventional and nonconventional water resources. A linear optimization framework is developed in which eighteen crop types act as players in a cooperative game, contributing to an overall benefit- and cost-sharing model. Optimal water allocation schemes prioritize crops with high economic productivity and low water demand, enhancing both sustainability and profitability. Based on the available water for irrigation in 2022 (baseline case), the NB is 23 million euros whereas the required subsidies, sourced from external entities, amount to 2 million euros. Groundwater recharge via managed aquifer recharge (MAR) is included as a scenario leading to a similar NB but increases subsidies to 3.5 million euros. Additional scenarios explore losses from aging infrastructure (increase of subsidies up to 70%), water quality constraints due to the presence of pollutants (NB and subsidies are 15 and 4 million euros, respectively), various storage strategies (reduction of subsidies about 20% of the baseline value) and future scenarios based on projected climatic conditions, resulting in the highest subsidies of nearly 9 million euros. This methodology offers a robust decision-making tool for policymakers and planners, helping to navigate the complexities of water allocation under uncertain future climatic conditions.

Variability of the Level of Budget Expenditures on Social Insurance of Farmers in the Agricultural Policy of Poland After Accession to the European Union

The purpose of this article was to examine the level and variability of budgetary expenditures directed to the Agricultural Social Insurance Fund (ASIF) in Poland in the form of subsidies to the Farmers’ Pension Fund in the period 2004–2024, i.e., after Poland’s accession to the European Union (EU). The aim of the study was also to determine the share of subsidies to the farmers’ social insurance fund in the total expenditures of the Polish agricultural budget, as well as the relationship of ASIF expenditures to state budget expenditures and GDP dynamics. The authors attempted to estimate the trend function for these time series and the degree of fit of the equations describing them. The formation of the nominal and real level of budget expenditures on the ASIF in 2004–2024 was evaluated. It was assumed that spending on the ASIF is an element of agricultural policy, realising its redistributive and social objectives, but indirectly also pro-development objectives by supporting generational change in agriculture. The research showed that the real level of spending on ASIF declined during Poland’s EU membership, as did the share of this spending in the total agricultural budget. The subsidy to the social security system also did not follow the changes in GDP and state budget expenditure proportionally, showing much less dynamism over the period studied. This means that budget support for farmers’ social security is losing its importance as an instrument of agricultural policy. It has been shown that the economic and social components of agricultural expenditure have not grown in harmony. The changes in the level of spending on the ASIF in the period 2004–2024 were also analysed in relation to demographic changes, i.e., the number of farmers insured in the ASIF and recipients of agricultural pensions. It has been shown that, despite a significant decrease in the number of farmers receiving pensions from the ASIF, there remains a large disparity between the average pension benefits of farmers and those of the general social insurance system (Social Insurance Institution—SII). The reduction in this disparity is not served by a real reduction in subsidies to the ASIF.

Subsidy reduction policies in clean product promotion: Pre-announced or dynamic?

Subsidy reduction policies in clean product promotion: Pre-announced or dynamic?

Catholic School as a Model of Interaction Between Church and State in Italy

The article deals with the phenomenon of Catholic schools as a model of interaction between the Church and the State in Italy. The objective of work is to consider the principle of “equality” as an alternative state option in education. The author concludes that the “equification” of Catholic and public schools in 2000 did not de facto give Italians the opportunity to choose freely the type of education for their children – a principle enshrined in the Italian Constitution. With the reduction of state subsidies, some “equal” schools are forced to close. The State's policy towards such schools is criticised by the Catholic Church and by Catholic public opinion, which rightly consider what is happening in view of the conflict between secular and religious culture. Christian principles, study of European culture, recognition of the dominant role of the family, centrality of the person, education in the spirit of solidarity, priority of collective values on individualism, respect for diversity, including those linked to disability – these fundamental principles of the Catholic educational project are appreciated by Italians who would like to raise their children in the respect of the Christian cultural tradition. The author concludes that in the context of globalisation, secularism, the state monopoly on education, Catholic education continues to be perceived by some Italians as the most important component of national identity.

How does progressive subsidy reduction affect the innovation and economic performance of new energy vehicle firms?

Effective subsidy withdrawal methods are important to minimize the adverse effects of such withdrawal on the industries supported by these subsidies. China adopted the progressive subsidy reduction policy (PSRP) for the new energy vehicle (NEV) industry in 2017. We examine how this policy impacts the innovation and economic performance of NEV firms (NEVFs). We first build a theoretical model to explore the evolution of the intrinsic relationship between NEVFs’ innovation and their economic performance. Then, we exploit the PSRP's implementation as a quasi-natural experiment, and examine its effects on the NEVFs’ innovation and economic performance based on Chinese listed firm data from 2015 to 2021. We find that the PSRP encourages NEVFs to improve innovation, but harms their economic performance in the short run. Furthermore, the PSRP promotes the innovation of firms in the growth and mature stages, original equipment manufacturers, and state-owned enterprises (SOEs), but does not affect their economic performance. Finally, the PSRP fails to improve the innovation of firms in the decline stage, component manufacturers, and non-SOEs, and worsens their economic performance. These findings provide valuable insights for governments on designing subsidy reduction policies and corresponding coping strategies for firms.

Распределение федеральных выравнивающих дотаций: оценка последствий основных изменений

The purpose of the work is to establish how the main changes in the methodology of distribution of grants from the federal budget for fiscal capacity equalization affected the budget revenues of the constituent entities of the Russian Federation. The relevance of the study is due to the fact that the way of distribution of non-earmarked interbudget transfers affects the effectiveness of the model of interbudget relations. The modeling of the values of the transfers allocated annually to each constituent entity of the Russian Federation has been performed, demonstrating the adequacy of the developed methodology. The consequences of all major changes in the methodology of allocation of subsidies, such as introduction of restrictions on the reduction and increase of transfers, launching the mechanism of the model budget, reducing the equalization criterion and adding the coefficient of the level of social burden to the index of budget expenditures, have been calculated. It was found that the changes in the distribution methodology were progressive, that is, the higher was the fiscal capacity before the distribution, the smaller was the annual increase in equalization grants as a result of the changes. In other words, over time, more and more funds were allocated to the least prosperous regions. The regions of the North Caucasus Federal District benefited the most from the changes, and in general, all the innovations, except for restrictions on the reduction and increase in subsidies, had approximately the same spatial effect in terms of the composition of the “winning” regions. At the same time, it is more difficult to draw conclusions about the “losing” regions, since they have different levels of fiscal capacity.

Social‐ecological systems modeling for drought‐food security nexus

AbstractDroughts pose severe threats to social systems, particularly to food security which is one of the priority targets in the UN's sustainable development goals (SDG 2). The drought‐food insecurity nexus entails the complex social‐ecological systems (SES) relationships (e.g., feedback) that underpin food insecurity, leading to disastrous consequence to society. To advance the knowledge on capturing the SES relationships of the drought‐food insecurity nexus, an SES model was employed (first attempt) to simulate these relationships to inform policies on food security in the context of climate change in Bangladesh. Different “what if” scenarios were examined determining the possible future trajectories of the system under socio‐economic and climate scenarios. Findings revealed that (i) with business‐as‐usual scenario, crop production and food security continue to increase at the expense of declining water resources over the simulation period; (ii) temperature changes (3.5–5.7°C) and surface water reduction due to dam and sustained groundwater decline may reduce food security (~55%); (iii) tipping risk increases due to severe reduction of food security when increasing temperature (>3.5°C) is combined with upstream water withdrawal (30%–50%), subsidy reduction (50%–100%), population growth and political instability. These indicate the need for an SES system perspective for increasing crop production and food security, simultaneously ensuring sustainable water resources and climate change adaptation. The model and findings are useful to achieve food security, and other related SDGs (1&6) in the context of climate change in Bangladesh and similar areas (e.g., Kenya), informed by the consequences of plausible alternative futures.

How photovoltaic industry policies foster the development of silicon solar cell manufacturing technology: Based on Self-attention mechanism

With the advancement of silicon solar cell manufacturing technology (SSCM-Tec) driven by subsidy policies, some developing countries have implemented subsidy reduction policies. Concurrently, intense international competition has prompted the implementation of restriction policies. However, due to SSCM involving multiple manufacturing steps, each step comprising various SSCM-Tec, it presents challenges in researching how different types of policies affect SSCM-Tec in each step. We construct the SSCM-Mechanism based on patent claims to capture the nuanced changes in SSCM-Tec caused by the implementation of policies. The results show that: (1) Policies lead to an imbalance in SSCM-Tec advancements among manufacturing steps; (2) Different types of policies have varying impacts on SSCM-Tec. Supportive policies boost enterprises' interest in developing SSCM-Tec, and restrictive policies and subsidy reduction policies speed up SSCM-Tec innovation; (3) The collaboration of various policy types can better drive the advancement of SSCM-Tec. Employing the right type of policy at the opportune moment serves as a crucial driving force for fostering innovation in SSCM-Tec. These findings reveal the multifaceted impact of policies on SSCM-Tec, providing policymakers with a clearer perspective to formulate more precise policies for guiding the direction of SSCM-Tec development and accelerating its innovation pace.

PROBLEMS OF GROWTH OF ALTERNATIVE ENERGY SOURCES IN CHINA

The article is devoted to the analysis of the problems of alternative energy in China. Ensuring economic growth is achieved by stable and sufficient supplies of energy to the needs of industry. Geopolitical tensions give rise to the development of national energy resources and, above all, renewable energy sources, development of which has a number of issues. A detailed examination of the 14th Five-Year (2021–2025) Energy Plan revealed challenges to China’s energy goals. Firstly, the main issue of alternative generation is the high level of «losses», i.e. the need to balance energy production with its consumption. The unevenness of energy production throughout the day, the lack of high-power batteries, as well as high-voltage lines for energy transmission, heighten this problem. Secondly, the struggle for land gives rise to competition with agriculture, construction and industrial sectors. Thirdly, alternative energy generation faces the problem of its insufficient efficiency (characterized by the ratio of energy production/ installed capacity, as well as energy density), which leads to reduction in subsidies and the replacement of renewable energy sources with more efficient, but currently less developed reserves of unconventional gas in China. The problem of subsidies is partly solved by the introduction of «green» financing as well as financing from special funds (AIIB, Silk Road Fund, NDB), that allows the implementation of distributed generation projects by attracting investor funds, as well as supporting promising energy production technologies. Most of the shortcomings relate to renewable energy sources, so China is actively developing other areas – nuclear generation, hydrogen production, and optimizing energy flows between inner regions.

Shaping the solar future: An analysis of policy evolution, prospects and implications in China's photovoltaic industry

Over recent decades, China has risen to a preeminent global position in both solar photovoltaic (PV) adoption and production, a feat underpinned by a suite of pivotal policy measures. With a burgeoning demand for PV systems on the horizon, there is an urgent need to reassess past policies and chart new directions. This study employs bibliometrics and content analysis to systematically scrutinize China's PV policies across distinct phases, delineating the underlying rationale and overarching evolutionary trajectory. It offers a comprehensive overview of these policies, encapsulating their metamorphosis through four discernible stages. The findings of this study shed light on a discernible policy trajectory within China's dynamic PV sector. Initially, policies were meticulously tailored to nurture domestic technological capabilities and ensure a comprehensive PV supply chain. Subsequently, the focus shifted towards the widespread application of PV technology. More recently, policies have evolved to prioritize regulatory refinement, subsidy reduction, and optimizing solar power consumption. These empirical insights underscore the pivotal role of supportive policies in propelling China's PV industry growth, with far-reaching implications for emerging sectors.

How does local context matter? Assessing the heterogeneous impact of electric vehicle incentive policies in China

This study reassesses the effectiveness of electric vehicle (EV) incentive policies in China and explores potential disparities in policy impact across different local contexts. Initially, employing panel data analysis, it evaluates policy effectiveness using data from 80 Chinese pilot cities spanning 2010 to 2022. Subsequently, cities are stratified based on varying income levels, traffic conditions, population density, and administrative hierarchy to facilitate an in-depth examination of the heterogeneous impacts of EV policies. Additionally, the Difference-in-Differences (DID) estimation method is employed to scrutinize the dynamic effects of these policies over time, enhancing the credibility of the panel model results. The findings reveal that purchase subsidies, parking benefits, driving privileges, and charging infrastructure have significant positive impacts on EV market share. Specifically, financial incentives are more effective in low-income, low-traffic, low-density cities, as well as in provincial capital cities while driving privileges are more suitable for high-income, high-traffic, and high-density areas. This study also finds that usage-phase policies increasingly drive EV adoption over time, offsetting the negative impact of subsidy reductions. The results of this study hold substantial implications for policymakers, providing insights to design context-based EV policies tailored to specific local conditions.

Effect of Input Subsidy Reduction on Greenhouse Emission Reduction Potential in Paddy Production Systems in Karnataka State of India

Increasing concerns and call for reduction in Greenhouse gas (GHG) emission have necessitated the search for broader and all-inclusive policy initiatives, extending into agricultural production, where high carbon energy inputs are used. One classical policy strategy for GHG emission reduction, has been taxation. However, given the critical role of agriculture, especially in developing economies, policies that directly or indirectly increase agricultural inputs costs and reduce their demand require stronger theoretical, conceptual and empirical support to ensure that while agri-environmental quality is promoted, welfare of farming households, food security and overall economic growth are not compromised. Using paddy production in Karnataka state in India, the study assessed effects of agricultural input taxation (reduction in rice input subsidy) on future demand for such inputs and their effect on GHG emission reduction, vis-a-viz production and welfare losses. In microeconomic modelling framework, we applied quadratic almost ideal demand system and stochastic efficiency functions in the analysis of the data. Data for the study, a micro-level farm data, was obtained from Cost of Cultivation Scheme (CSS) for irrigated and non-irrigated production systems, covering the period 2009 -2018 production seasons. Specifically, the study used three future tax regime scenarios- 10%, 20% and 30% input subsidy reduction rates, to model an optimum greenhouse emission reduction potential. The results revealed that inputs evaluated were normal with inelastic demand functions; many input coefficients implied significant complementary relationships; irrigated paddy production system had higher estimates of GHG emissions. Input taxation (reduction in subsidy) under all the three scenarios effectively, resulted in declined inputs consumption patterns, and subsequently led to significant decrease in greenhouse emissions. The highest GHG emission reduction potential was observed in irrigated farming system. Greenhouse emission reduction potential was optimal at moderate subsidy reduction policy rate of 10%. It is recommended that, given the inelastic estimates derived, moderate tax (reduction in subsidy) policy option on inputs would yield effective greenhouse mitigation with appropriate compensation through effective integrative schemes.

How do nonsubsidized incentive affect enterprises' innovation choices? A case from the new energy vehicle industry in China

Faced with the mainstream trend of subsidy reduction, how to effectively guide NEV enterprises to innovate through nonsubsidized incentive is a pressing issue to be addressed in the transformation process of China’s NEV industry. Based on the distinctive characteristics of China's NEV industry, this study proposed corresponding theoretical hypotheses combined with the smile curve theory. Propensity score matching method was used to verify the influence and mechanism of nonsubsidized incentive on the innovation choices of NEV enterprises in segments of production and consumption. The results indicate that nonsubsidized incentive in the production segment stimulates the product innovation of NEV enterprises, especially those with political and industrial chain connections through mechanism of market competition. Nonsubsidized incentive in the consumption segment stimulates service transitions among NEV enterprises, particularly those lacking political connections but possessing industrial chain connections, through mechanism of scale expansion. Therefore, to promote the innovative development of emerging industries, policy should be shifted from ‘transfusion-style’ to ‘hematopoietic-style’, gradually cultivating enterprises' independent innovation capabilities. Meanwhile, policy resources should be allocated according to resource differences among enterprises. This study provides practical policy recommendations for the transformation of China's NEV industry and offers insights into the development of emerging industries for developing countries.

Green Fiscal and Tax Policies in China: An Environmental Dynamic Stochastic General Equilibrium Approach

Implementing green fiscal and tax policies for reducing emissions and pollution without negatively impacting economic growth remains a challenge. We aimed to determine whether environmental protection and economic growth can both be attained under a green fiscal and tax policy. Specifically, we created a dynamic stochastic general equilibrium (DSGE) model to explore the environmental, economic, and welfare impacts of green fiscal and tax policies. Additionally, a welfare analysis based on an environmental DSGE (E-DSGE) model was performed. We found that (1) raising the environmental or energy tax rate was beneficial for reducing emissions and environmental pollution. However, this approach inhibited economic growth, an outcome not conducive to improving welfare. (2) Increasing the subsidy rate for emission reduction not only incentivized businesses to reduce emissions but also improved economic growth and welfare. (3) The emission reduction mechanisms of environmental tax policies, energy tax policies, and subsidy policies are different. Among them, the environmental tax policy and the energy tax policy both reduce pollution by forcing businesses to increase their emission reduction efforts, but the former is a tax on pollution emissions, while the latter is a tax on energy consumption. However, emission reduction subsidy policies incentivize companies to increase their emission reduction efforts and reduce pollution emissions by alleviating their financial burden. (4) Increasing government spending on environmental remediation could promote economic growth. However, considering that this does not motivate companies to reduce emissions, increasing their share will lead to a reduction in emission reduction subsidies, ultimately negatively impacting social welfare. (5) An environmental tax would cause greater losses in welfare than an energy tax. These findings will enable policymakers to optimize expenditures and tax systems.

Willingness to Pay for Environmental Conservation: Subsidy Reduction as a Payment Vehicle

Willingness to Pay for Environmental Conservation: Subsidy Reduction as a Payment Vehicle

Willingness to Pay for Environmental Conservation: Subsidy Reduction as a Payment Vehicle

Willingness to Pay for Environmental Conservation: Subsidy Reduction as a Payment Vehicle

Removing Price Subsidies and Impacts on Consumption and Production Patterns: Evidence From a Systematic Literature Review

Due to the increasing trend in prices for food and energy products in global markets, subsidy removal and complementary policies have received significant attention in recent years. Critics of subsidy removal express concerns about the potential negative effects on the economy, including impacts on GDP, employment, household welfare, and production sectors. This has led to worries among majority economic policy-making bodies regarding potential social unrest, particularly its impact on low-income households. Therefore, there exists a debate in the literature on the potential impacts of subsidy removal. This study aims to provide a comprehensive overview of the impacts of subsidy removal policies and related subjects using the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA). The main research question is, ‘Do subsidy removal schemes necessarily lead to economic distortions?’ The results indicate that impacts on the economy and household indicators are more explored than the influences on government and industry. The magnitude of these impacts varies depending on the types of subsidies and the extent of subsidy reduction. Considerable attention has been given to the impact of energy subsidy removal in Asian developing countries, while there is a lack of studies on other subsidized products and developed countries. Governments are advised to investigate their unique internal policy dynamics while considering external environments.

Heterogeneous variations in wintertime PM2.5 sources, compositions and exposure risks at urban/suburban rural/remote rural areas in the post COVID-19/Clean-Heating period

Inevitably, both unblocking of the COVID-19 (UNCOV) and uncertainty in the clean heating policy (2017–2021) in winter 2022 imposed complex impacts on PM2.5 variations. Together, the urban-rural and rural-rural disparities in these impacts remain unclear. To address this gap, we conducted a synchronous observation at urban (UA)/suburban rural (SRA)/remote rural (RRA) areas to probe PM2.5 evolutions in the post COVID-19/clean-heating (PCOV/PCH) period for further site-specific policy implications. Similar meteorological conditions among sites benefited examining the effects of emission variations. On average, PM2.5 presented a decline order as RRA > UA > SRA. Invoking the positive matrix factorization (PMF) results, specially, the primary emissions (PE) rebounded again after experiencing a continuous decline since the stringent emission-control polices initiated in 2013. PE contributions were up to 80.2 %–83.0 % for three points. SRA benefited most from coal-to-gas and coal combustion (CC) has become its minimum contributor (10.8 %). Concurrently, subsidy reduction and natural-gas (NG) shortage compelled biomass burning (BB) to be the largest origin (21.9 %) marked by the highest K+, Cl− and OC/EC. Regarding RRA, CC (26.5 %) and BB (19.6 %) have been the first and second largest origins despite that the coal-to-electricity policy, indicating the slowdown of policy enforcement. The highest SO42−, As, Sb, Tl, OC, EC and the lowest NO3−/SO42− further verified the dominant CC. Production recovery made industrial emissions (IE) become the largest source (26.8 %) at UA. The metal associated health risks peaked at RRA due to large impacts of CC, though the most of metals related to small-scale industries peaked at UA. This is the first work to highlight that more targeted site-specific strategies in prevention/control of dominant primary sources should be formulated in the PCOV/CH period.

The role of venture capital in determining the total factor productivity of renewable energy enterprises: In the context of government subsidy reduction

Studies examining the correlation between venture capital (VC) and total factor productivity (TFP) have yielded inconsistent conclusions. In the context of government subsidy (GS) reduction, VC is gradually becoming a crucial external financing channel for renewable energy (RE) enterprises. Nevertheless, there is a scarcity of research concerning the influence of VC on the TFP of RE firms, and the impact of GS on their relationship is also insufficiently considered. Therefore, employing two-way fixed-effects and threshold effects models, this research investigates the impact of VC on TFP in 114 Chinese RE enterprises from 2011 to 2021 and analyzes the role of GS in shaping this association. The conclusions are outlined as follows: (1) Overall, VC notably boosts the TFP of RE firms. (2) VC can indirectly improve TFP by fostering R&D investments and mitigating financing constraints. (3) A single threshold effect is identified in the correlation between VC and TFP based on GS. Significant positive effects of VC on TFP are observed only when GS is below 1.07%. This implies that, in the context of GS reduction, the beneficial effect of VC on the TFP of RE firms is gradually becoming evident. Based on this, we propose targeted policy suggestions.

Exploring effective incentive policies for sustainable development of green buildings in China: based on evolutionary game theory and numerical simulation analysis

PurposeThis study reveals the green building development path and analyzes the optimal government subsidy equilibrium through evolutionary game theory and numerical simulation. This was done to explore the feasible measures and optimal incentives to achieve higher levels of green building in China.Design/methodology/approachFirst, the practice of green building in China was analyzed, and the specific influencing factors and incentive measures for green building development were extracted. Second, China-specific evolutionary game models were constructed between developers and homebuyers under the market regulation and government incentive mechanism scenarios, and the evolutionary paths were analyzed. Finally, real-case numerical simulations were conducted, subsidy impacts were mainly analyzed and optimal subsidy equilibriums were solved.Findings(1) Simultaneously subsidizing developers and homebuyers proved to be the most effective measure to promote the sustainability of green buildings. (2) The sensitivity of developers and homebuyers to subsidies varied across scenarios, and the optimal subsidy level diminished marginally as building greenness and public awareness increased. (3) The optimal subsidy level for developers was intricately tied to the building greenness benchmark. A higher benchmark intensified the developer’s responsiveness to losses, at which point increasing subsidies were justified. Conversely, a reduction in subsidy might have been appropriate when the benchmark was set at a lower level.Practical implicationsThe expeditious advancement of green buildings holds paramount importance for the high-quality development of the construction industry. Nevertheless, the pace of green building expansion in China has experienced a recent deceleration. Drawing insights from the practices of green building in China, the exploration of viable strategies and the determination of optimal government subsidies stand as imperative initiatives. These endeavors aim to propel the acceleration of green building proliferation and materialize high-quality development at the earliest juncture possible.Originality/valueThe model is grounded in China’s green building practices, which makes the conclusions drawn more specific. Furthermore, research results provide practical references for governments to formulate green building incentive policies.