The Effect Of Environmental Taxes On The Quantity And Quality Of Green Technology Innovation

China is currently at a critical stage of transformation and upgrading,where it is necessary to maintain sustained economic growth while controlling energy consumption and pollution emissions.The "double carbon target" proposed by Xi Jinping at the 75th UN General Assembly,that China’s carbon dioxide emissions will peak by 2030 and become carbon neutral by 2060,will certainly have a profound impact on the overall green transformation of China’s economy and society,and encouraging enterprises to carry out green technological innovation is seen as a solution to the economic growth in By the end of 2020,China’s CO2 emissions per unit of GDP will have fallen by 48.4%compared to 2005,already meeting China’s commitment to the international community of 40%-45%.However,in absolute terms,China’s total carbon emissions of 9.9 billion tonnes in 2020 still rank first in the world.How to achieve the double carbon target within a limited period of 30-40 years is a matter of great concern to both political and academic circles.As a market-based incentive-based environmental regulation,environmental protection tax is important in guiding enterprises to control pollution and energy consumption and achieve green transformation.The 1979 Law of the People’s Republic of China on Environmental Protection(for Trial Implementation)established a system of sewage charges,which plays an important role in pollution control,but there are many problems such as excessive intervention by government departments and an unreasonable structure of charges,which make it difficult to effectively curb the pollution behaviour of enterprises and stimulate their green technological innovation.It is difficult to effectively curb the pollution behaviour of enterprises and stimulate their green technological innovation.In view of the lack of rigidity in the collection of sewage charges,the intervention of local government departments and the low level of charges,it is difficult to meet the actual needs of environmental protection and economic development in China at this stage.In 2016,the legislation of the Environmental Protection Tax Law of the People’s Republic of China was passed and formally implemented in 2018,marking the formal history of China’s sewage charge system and the start of the environmental protection tax system on the historical stage.How to give full play to the environmental and economic dividends of the environmental protection taxation system,and use taxation policy to pry enterprises to innovate in science and technology,is of great significance to the overall green transformation of China’s economy and society.Against this backdrop,China’s green technology innovation activities have become increasingly active and the number of green patent applications has grown by leaps and bounds.According to the China Green Patent Statistics Report(2014-2017),249,000 green patents were filed in China from 2014-2017,growing at a rate of 21.5%,3.7 percentage points higher than China’s average annual growth rate of 17.8%.However,does the rapid growth of the green patent market really mean a high level of development of green technology innovation in China?Some scholars have questioned this.Tao Feng,Zhao Jinyu and Zhou Hao(2021),in their study of the incentive effect of environmental regulation policies on green technological innovation,found that the implementation of the environmental protection target responsibility policy,while promoting an increase in green patent applications,caused a decline in the quality of technological innovation.Li Qingyuan and Xiao Zehua(2020)also note that the effects of firms’ green innovation capabilities under the influence of different environmental regulatory policies are diametrically opposed,e.g.an emissions charging system will drive firms’ green invention patent output,while environmental subsidies have a crowding-out effect on this effect.What are the micro effects of the implementation of environmental protection tax as a highly valued reform of the environmental system?Will it truly lead to a high quality of green innovation activity?What are the characteristics and mechanisms of impact in a heterogeneous context?With the help of green patent information provided by the International Patent Classification(IPC),this paper explores the implementation effects of the PRC Environmental Protection Tax Law on green technological innovation in China from two different perspectives,namely the quantity and quality of green patent applications,and the differences in terms of firm size,industry type and regional marketability.Using a double-difference approach,this paper finds,based on patent data of A-share listed companies in China’s manufacturing sector from 2015 to 2020,that firstly,the environmental protection tax,as a new member of the environmental regulatory system,has a significant contribution to green technological innovation,significantly increasing the quantity of green technological innovation in the short run,while in the long run,the environmental protection tax is more conducive to stimulating high-quality innovation.Secondly,there are differences in the amount of environmental taxes implemented in different regions,and such differences in tax levels can also have different impacts on green technology innovation.Currently,regions implementing higher tax levels have higher levels of green technology innovation-in terms of both quantity and quality-than regions implementing medium to low tax levels.This suggests that an appropriate increase in the environmental levy is more conducive to stimulating innovation than simply levelling the rate of the emissions charge.Furthermore,the implementation effect of environmental levies on green technology innovation differs across contexts,with environmental levies having a more pronounced impact on the quantity and quality of green technology innovation in small-scale enterprises,highly competitive industries and areas with a high degree of marketisation.This paper provides some ideas for exploring the effect of environmental protection tax on the implementation of green technological innovation in the context of "double carbon".Our findings may help to improve the construction of green taxation system,guide enterprises to change their development concept,stimulate green technological innovation to increase quantity and improve quality,and achieve green transformation development.