Empirical Research Of The Environmental Effects Of Fiscal Revenue And Expenditure Policy In China

Since China’s reform and opening up and with the accelerating of its industrialization process, the environmental problem increasingly becomes a major issue demanding prompt solution for its economic and social development. The solution of the environmental problem is important not only to the sustainable development of economy and society but also to the human survival.Since the industrial revolution, the developed countries paid a terrible price on society, economy and environment for the traditional path of industrialization. Not only China follows the path of industrialization of developed countries, but also the short-time and fast process of China’s industrialization, which cause that all kinds of environmental problems mutually superimposes and affects and make China’s environmental problem more complicated.Environmental protection is the bounden duty of the government, and promoting the construction of ecological civilization is an important part of the national governance. Environmental quality is the basis and core of ecological environmental protection. From the economic point of view, as basic public goods, environmental quality is mainly affected by the negative externality of environmental pollution and positive externality of environmental protection. From the general sense, solving environmental problems needs to eliminate or reduce the negative externality of environmental pollution and enlarge the positive externality of environmental protection effect. It is because of the existence of externality that makes government intervention is a must, and just relying on market forces or social forces is unable to effectively solve the environmental problem.There are many measures for governments to solve the environmental problem, and one of the most important and direct measure is the fiscal policy. The core means of the fiscal policy is the fiscal revenue and public expenditure policy. The fiscal revenue policy is mainly used for adjusting the negative externalities of environmental pollution, and the public expenditure policy is mainly used for compensating the positive externalities of environmental protection. In particular, on the intervention of the negative externality of environmental pollution, governments mainly adopt environmental tax policy to guide and constrain the behavior of the polluters to make the external costs internalized; on the intervention of the positive externality of environmental protection, governments mainly use the public expenditure policy to provide public service to stimulate and compensate environmental protection. Based on the above analysis, this paper mainly focuses on environmental quality, with the key point of the positive and negative externality of the environment, to correct, analyze and evaluate the environmental effect of China’s fiscal revenue policy especially the tax policy and public expenditure policy and the efficiency of environmental fiscal expenditure. What’s more, this paper also analyzes the environmental fiscal revenue and expenditure policy of the United States.The paper is organized as follows. Chapter1is an introduction. Chapter2mainly reveals the internal mechanism of fiscal policy and environmental quality. Chapter3through empirical study, it evaluates the environmental effects of fiscal revenue policy in China. The result shows as follows:there are interaction relationship between tax burden, tax structures and environmental quality. The increasing of tax burden impacts the tax structures and environmental quality through direct and indirect effects. The tax and sewage charge system has little positive environmental effects. Chapter4empirically analyzes the environmental effect of public expenditure policy and the environmental quality. The result shows as follows:the expansion of China’s total public expenditure improves the environmental quality. The effect of public expenditure on the environment can be distinguished between direct and indirect effects, the direct effect is insignificant, while the indirect effect is significant. There are significant differences in the effects of different kinds of public expenditure on environmental quality. Chapter5estimates the efficiency of environmental public expenditure and analyzed the influence factors of the efficiency. The result shows as follows:There are significant prefecture-level differences in the environmental public expenditure efficiency, pure technical efficiency rises slowly. The environmental public expenditure efficiency of some districts needs to be improved. In Chapter6, we perceive the United States as a model of success of environmental protection in the western countries. This chaper analyzes the environmental fiscal policy of the United States. The study found that:the perfect environmental taxation provide a strong guarantee for investment of environmental protection. Performance oriented environmental budget system is an effective guarantee of environmental fiscal expenditure efficiency. High levels of environmental science researching input provide a solid material foundation and technological support for the environmental protection work of the United States. Chapter7concludes.Gradual market-oriented path and Chinese fiscal decentralization reform makes the local governments become independent economic subjects and the pursuit of economic development and fiscal revenue become the primary goal of local governments. Relaxing environmental regulation and management of the economic development makes the environmental quality worse sharply and the pollution enterprises gather. The combination of political centralization and economic decentralization leads to the expansion of the scale of the local public expenditure, and the significant distortion of the public expenditure structure. Also the arrangement of the whole system of public expenditure has not considered the coordination of "economy-society-environment", which makes the slow growth and the low efficiency of environmental expenditure. China’s fiscal revenue and expenditure system cannot effectively respond to residents about the urgent need of good living environment. With the goal of environmental protection, the reform of China’s fiscal revenue and expenditure policy needs to be on the agenda.