Spatial effects and heterogeneity analysis of the impact of environmental taxes on carbon emissions in China

Environmental taxes are important means by which governments can address environmental pollution problems. Amid increasingly severe global warming, how should environmental taxes be used to better combat pollution and reduce emissions to promote sustainable socioeconomic development? This empirical analysis explores the influence of environmental taxes on CO(2) emissions by utilizing a spatial Durbin model constructed with panel data from 2006 to 2020 encompassing 30 provinces, autonomous regions, and municipalities under the direct jurisdiction of China's central government. First, we found that a strong spatial auto-correlation exists between carbon emission intensity and environmental taxes at the geographic and economic levels in each province. The characteristics of high–high and low–low agglomeration are consistent with the actual situation where each province has a strong regional correlation. Second, the estimation results of environmental taxes' spatial effect on carbon emissions show that under the neighboring space weight matrix, environmental taxes and fees can not only better promote regional carbon emission reduction but also reduce the carbon emissions of neighboring regions. Under the economic distance weight matrix, environmental taxes' impact on reducing carbon emission intensity in the province is not significant, but it can promote the reduction of carbon emissions in the economically neighboring provinces. Additionally, the results of the sub-tax estimation of environmental taxes and carbon emission intensity show that differences exist in the impacts of different environmental taxes on carbon emission intensity under different weight matrices. Among them, environmental protection, resource, vehicle and vessel, and urban land use taxes are basically unfavorable in reducing carbon emission intensity in a region and its neighboring regions, while urban maintenance and construction and cultivated land occupation taxes enhance carbon emission reduction. Our findings suggest that efficiently promoting carbon emissions reduction requires effectively utilizing the spatial effects of environmental taxes and carbon emissions, establishing and improving the regional carbon emissions reduction linkage mechanism, including carbon dioxide in the scope of taxation to further strengthen environmental taxes' positive impact on carbon emission reduction, and focusing on the heterogeneity of environmental tax implementation to achieve emission reduction goals.