Taxing for a Green Future: How China’s Environmental Protection Tax Law Drives Energy Efficiency.

Environmental regulations can effectively mitigate environmental degradation, yet their impact on energy efficiency remains unclear. This study contributes to the existing literature by examining how the Environmental Protection Tax Law (EPTL) drives energy efficiency and demonstrating its environmental and economic dividends. Empirical evidence from a dataset of 271 Chinese prefecture-level cities from 2011 to 2020 reveals that EPTL significantly enhances energy efficiency by 3.8%, and it has a positive spatial spillover effect. The underlying mechanisms are improvements in environmental governance and economic development. Heterogeneity analysis highlights a particularly prominent positive impact in the eastern and western regions. Our study confirms the effectiveness of EPTL in promoting energy efficiency and supports the double dividend hypothesis, providing policymakers with insights for formulating differentiated policies. [ABSTRACT FROM AUTHOR]