Exploring the fiscal context of electricity consumption in China: Does the Chinese-style fiscal decentralization matter?

In the context of carbon neutrality, reducing electricity consumption is an inevitable requirement for sustainable development in China. It is of practical significance to understand the role of fiscal decentralization (FD) in energy conservation and emission reduction of local governments. This paper uses panel data of 30 provinces from 2004 to 2020 to build panel fixed effect, mediating effect and moderating effect models, and empirically analyzes the impact of Chinese-style FD on electricity consumption. The results find that FD significantly increases electricity consumption, but there is obvious heterogeneity. Infrastructure construction, industrial development and scale economies are the influencing channels through which FD affects electricity consumption. At the same time, marketization development is conducive to alleviating the promoting effect of FD on electricity consumption, but inter-governmental investment competition may strengthen the influence of FD. Moreover, as electricity demand rises, the impact of FD will intensify. Therefore, the research results of this paper highlight the importance of green fiscal reform.