The nexus of fiscal policy instruments and environmental degradation in China

Yuelan, Peng; Akbar, Muhammad Waqas; Hafeez, Muhammad; Ahmad, Manzoor; Zia, Zeenat; Ullah, Sana

doi:10.1007/s11356-019-06071-4

Cited by 110 publications

(51 citation statements)

References 49 publications

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“…The study’s result indicates the positive relationship between economic growth and the three pollutions factors. This corresponds to [ 33 ], who clarified the linkage between government expenditure as fiscal policy proxy and environmental quality in China for the period 1980–2016. The empirical result indicates the positive relationship between government expenditure and environmental degradation with the existence of EKC hypothesis, both in the long and short term.…”

Section: Literature Reviewmentioning

confidence: 54%

Testing the Environmental Kuznets Curve Hypotheses in Chinese Provinces: A Nexus between Regional Government Expenditures and Environmental Quality

Zeraibi

Balsalobre‐Lorente

Shehzad

2021

IJERPH

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With rapid economic growth, the Chinese government expenditures at various levels have increased adequately. At the same time, the environmental quality in China has deteriorated significantly. In this study, provincial-level data for 31 Chinese provinces during 2007–2017 are used to investigate the impacts of government expenditure on the emissions of three specific measures of environmental degradation. The main objective of this study is to examine the influence of government expenditures, economic growth per capita, environment protection expenditure, and added second-sector value on environmental quality by measuring sulfur dioxide (SO2), chemical oxygen demand (COD), and ammonia nitrogen emissions (AN). Moreover, the study applied the generalized method of moments (GMM) and the fully modified least square (FMOLS) to estimate the co-integration relationship among the underlying factors. The results demonstrate a significant direct effect of government expenditure on improving environmental quality overall in the Chinese provinces, which increases with the level of economic growth. However, the results also confirmed the inverted N-shaped relationship between the pollution factor and economic growth per capita. Our key findings lead toward the manifestation and emphasis of the importance of appropriate policies for restoring government expenditure and, at the same time, strengthening the relationship between the industrial sector and environmental policy standards. Significantly, governments in developing countries should allocate larger budgets for environmental projects in their fiscal reforms for the sake of moving to greener and more inclusive economies with low-carbon activities.

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Section: Literature Reviewmentioning

confidence: 54%

Testing the Environmental Kuznets Curve Hypotheses in Chinese Provinces: A Nexus between Regional Government Expenditures and Environmental Quality

Zeraibi

Balsalobre‐Lorente

Shehzad

2021

IJERPH

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“…According to prior findings, some of the main macroeconomic determinants of environmental pollution reported in earlier studies include, but are not limited to, the inflow of remittances (M. Ahmad, Ul Haq, et al, 2019), aggregate domestic demand consumption (M. Ahmad & Khattak, 2020), national income (Grossman & Krueger, 1995), foreign direct investment, energy consumption (Mirzaei & Bekri, 2017), globalization (Shahbaz, Adebola, & Ozturk, 2016), international trade (Lv & Xu, 2019), urbanization (Wang, Li, & Fang, 2018), fiscal policy instruments (Yuelan et al, 2019), population growth rate (Harper, 2013), financial development (Dar & Asif, 2017), and innovation (Khattak, Ahmad, Khan, & Khan, 2020). Beyond the factors listed above, this paper considers monetary policy as a new and unexplored factor of pollution for the following reason.…”

Section: Introductionmentioning

confidence: 99%

A new approach to environmental sustainability: Assessing the impact of monetary policy on CO₂ emissions in Asian economies

Jiang

Khattak

Ahmad

et al. 2020

Sustainable Development

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125

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This paper offers a unique perspective in the field of environmental economics and research by linking CO 2 emissions (CO 2 e) and monetary policies. Through a newlydeveloped predictive model, the study estimated the impact of monetary policies on CO 2 e along with control variables, including income, remittances, urbanization, fossil fuels, and human capital in selected Asian economies for the period 1990-2014. Data were analyzed using the Pedroni and Kao co-integration tests, panel fully-modified (PFM-LS), and panel dynamic least squares (PD-LS) techniques for data analysis. Some of the main findings are as follows. First, the results showed a significant long-term positive relationship between expansionary monetary policy and CO 2 e. Second, the contractionary monetary policy serves an effective measure to mitigate CO 2 e. Third, improvements in human capital have a positive impact on reducing CO 2 e. Fourth, remittances and fossil fuels are also prime determinants of CO 2 e. Based on the present findings, the paper proposes important implications and a predictive tool for policymakers to design effective policies and strategies for reducing CO 2 e.

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“…Fiscal expenditures negatively affect the quality and standards of the environment by differentiating the real causes of environmental degradation in form of either consumption or production produced. Similarly, in the context of China, Yuelan et al (2019) empirically explored the positive and significant relationship between environmental degradation and fiscal policy tools (particularly expansionary fiscal policy tools). A positive and significant impact of public expenditure in both consumption 2 emission and production 2 has been explored (Muhafidin, 2020).…”

Section: Empirical Results and Descriptionmentioning

confidence: 99%

“…Fiscal instruments are significant determinants in the USA while Yeulan et al (2019) explored the same conclusion for China which is to some extend is exact to the existing results of this research paper. Similarly, many studies have explored the symmetric impact of fiscal policies on environmental quality (Lepoz et al, 2011;Katircioglu and Katircioglu 2018;Chan 2020;Paizanos 2016 andYuelan et al, 2019) Above all, the best 20 ARDL models are given in Table 7. There are five different types of model selection criteria which are log-likelihood, SBC, HQ, AIC, and adjusted 2 .…”

Section: Empirical Results and Descriptionmentioning

confidence: 99%

Fiscal policy and environment: a long-run multivariate empirical analysis of ecological footprint in Pakistan

Zahra¹,

Khan

Nouman

2021

Environ Sci Pollut Res

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Despite differences in carbon emissions shares and differences in ecological footprint patterns of each nation, these differences are guaranteed to show similar features in long run, thus making it a global issue.An increase in economic growth contributes to an increase in waste production with an impact on environmental degradation and climate change. An ecological footprint is a relatively comprehensive measure than previously used 2 emission as an environmental proxy as it includes comprehensive multi-facets environmental indicators because ecological footprint includes built-up land, 2 emission, cropland, fishing ground, grazing land, and forest products which has included all environmental dimensions. This research has focused to empirically investigate the long-run impact of fiscal policy on the ecological footprint in Pakistan keeping different socio-economic factors into consideration. Per annum, time-series data have been collected between 1976 and 2018. The Augmented Dickey-Fuller test has been employed to determine the unit root of the data. To investigate the long-run association between fiscal policy and ecological footprint, modern econometric techniques such as Johansen co-integration test, ARDL Bounds test, different diagnostic tests, and variance decomposition analysis are used. Johnson co-integration test depicts significant long-run co-integration between fiscal policy, ecological footprint, and its major socio-economic determinants in Pakistan. Conclusion of ARDL model shows that 1% increase in public development expenditures, total population, GDP, and energy consumption increase 0.19, 2.17, 1.16, and 2.17% ecological footprint respectively in Pakistan between 1976 and 2018 and vice versa. However, it is also derived that a 1% increase in public tax and non-tax revenue and public current expenditures (in health, education, and other social sectors) shrink 0.36 and 0.013% ecological footprint in the long-run in Pakistan. The stability, reliability, and credibility of the ARDL model are found correct based on different diagnostic tests. Variance decomposition analysis also depicts fiscal policy significantly cause ecological footprint in Pakistan.

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The nexus of fiscal policy instruments and environmental degradation in China

Cited by 110 publications

References 49 publications

Testing the Environmental Kuznets Curve Hypotheses in Chinese Provinces: A Nexus between Regional Government Expenditures and Environmental Quality

Testing the Environmental Kuznets Curve Hypotheses in Chinese Provinces: A Nexus between Regional Government Expenditures and Environmental Quality

A new approach to environmental sustainability: Assessing the impact of monetary policy on CO₂ emissions in Asian economies

Fiscal policy and environment: a long-run multivariate empirical analysis of ecological footprint in Pakistan

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The nexus of fiscal policy instruments and environmental degradation in China

Cited by 110 publications

References 49 publications

Testing the Environmental Kuznets Curve Hypotheses in Chinese Provinces: A Nexus between Regional Government Expenditures and Environmental Quality

Testing the Environmental Kuznets Curve Hypotheses in Chinese Provinces: A Nexus between Regional Government Expenditures and Environmental Quality

A new approach to environmental sustainability: Assessing the impact of monetary policy on CO2 emissions in Asian economies

Fiscal policy and environment: a long-run multivariate empirical analysis of ecological footprint in Pakistan

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A new approach to environmental sustainability: Assessing the impact of monetary policy on CO₂ emissions in Asian economies