Green growth and environmental sustainability in China: the role of environmental taxes

This study aims to investigate the impact of environmental-related taxes on green growth and CO2 emissions in China covering the time 1996–2019. To get the short- and long-run estimates, we have applied the bounds testing approach. Estimates of the study provide some important results. In the short run, environmental taxes and environmental policy stringency estimates are negatively significant in the CO2 emissions models and positively significant in the green growth models. Likewise, the long-run estimates attached to environmental taxes are significantly negative in the basic and robust CO2 emissions models while insignificant in the green growth models. However, the long-run estimates of environmental policy stringency are significantly negative in the basic and robust CO2 emissions models and significantly positive in the basic and robust green growth models. In general, our findings imply that an increase in environment-related taxes and strictness in environmental policies help reduce CO2 emissions and promote green growth in China.