The Cost Of Environmental Policy

In fact,the history of industrial civilization can be seemed as a history of environmental pollution.With the deepening of industrialization,the improvement of economic level,the pollution problem,the space of environmental pollution is grown rapidly,which poses a major threat to human health and sustainable development.In order to solve the increasingly severe situation of environmental pollution,countries around the world have enacted relevant policies to restrict the environmental pollution behaviors of enterprises and individuals.However,while improving environmental quality and ensuring individual health level,whether the implementation of environmental policies will have an impact on the development of manufacturing industry.In other words,whether the environmental policy should sacrifice the development of manufacturing industry as the cost of environmental quality improvement.Using the comprehensive demonstration of energy saving and emission reduction fiscal policies,this paper constructs a quasi-natural experiment,using DD method,to study the impact of environmental regulation on the upgrading of regional manufacturing industry.After empirical analysis,the research conclusions of this paper include the following three points:First,one of the costs of the comprehensive demonstration of fiscal policies on energy conservation and emission reduction is the inhibiting effect on the upgrading of the manufacturing industry,which mainly comes from the polluting industries in the developed manufacturing areas.Second,the mechanism of the influence is as follows:the policy leads to the increase of water and electricity costs of polluting enterprises,which in turn leads to the decrease of profit margins of polluting industries,thus generating the effect of resource redistribution among industries.At the same time,the dispersion of producer services also leads to the emergence of this phenomenon.Third,the causal effect is more obvious in central heating areas with high environmental pressure and in areas with high government efficiency.The conclusion can provide empirical evidence for the understanding of the impact of environmental regulation on the upgrading of manufacturing and its mechanism.According to the above conclusions,the policy Suggestions proposed in this paper include the following three aspects:First,when formulating environmental protection policies,we should take into account its impact on the upgrading of the manufacturing industry and play a "combination punch".Although environmental protection policies can promote energy conservation and emission reduction by restraining the development of polluting industries.However,while inhibiting the development of polluting industries,the policy has not effectively promoted the development of non-polluting industries.Therefore,in promoting economic development under the background of high quality,need in environmental policy at the same time introduced a series of supporting measures,curb pollution industry at the same time,the development of energy conservation and emissions reduction of give attention to two or morethings and manufacturing industry to upgrade,to encourage the pollution in manufacturing industry growth,so as to realize economic development pattern transformation,realize green growth and low-carbon development.Second,we will further cut taxes and fees to promote the development of the manufacturing sector.Policies mainly promote environmental protection and reduce pollutant emissions by raising water and electricity bills,lowering the profit margins of polluting sectors and directing resources away from these industries.Therefore,in the process of promoting the development of non-polluting sectors,this idea can be used for reference.By actively promoting tax reduction and fee reduction,reducing enterprise costs and increasing enterprise profits,the flow of production factors to non-polluting sectors in the manufacturing sector can be attracted to promote the development of the manufacturing sector.Third,the government should focus on improving its governance capacity,strive to modernize China’s governance capacity,and respond to various risks and challenges by establishing systems that are fully systematic,scientific,standardized and effective.For regions with a better manufacturing base and a severe environmental situation,the cost of upgrading the manufacturing industry caused by the comprehensive demonstration of fiscal policies on energy conservation and emission reduction is more significant.This is closely related to the promotion and assessment system of local government officials.Therefore,the assessment system should be formulated scientifically and the weight of each assessment index should be set reasonably.In this way,while local officials actively eliminate backward production capacity,they can also take into account the transformation and upgrading of the manufacturing industry,so as to find the balance between environmental protection and the development of the manufacturing industry,and form a win-win situation of high-quality economic development and ecological quality improvement.Compared with previous studies,there are three innovation points of this paper:First,this paper evaluates the impact of China’s environmental policies on the upgrading of manufacturing industry.In addition to discussing the policy effect,this paper also discusses the impact mechanism and its heterogeneous impact on different regions.Second,the research results of this paper supplement the research conclusions of Lin&Zhu(2019a),which show that the comprehensive demonstration of fiscal policies for energy conservation and emission reduction has a promoting effect on emission reduction of major pollutants.This paper extends the conclusion of this study,namely,how the policy will influence the development of manufacturing industry while promoting energy conservation and emission reduction.Third,previous studies mostly used output ratio and scale ratio among industries to measure structural changes,but these indicators did not consider changes in productivity,and these indicators could not accurately measure structural changes within the manufacturing industry.In this paper,industrial technological complexity is used to measure manufacturing upgrading at the city level and tax survey data are used to calculate this index.Although the relationship and mechanism between environmental policy and manufacturing upgrading are discussed in this paper,only the local equilibrium effect of policy effect can be obtained,which is the deficiency.To be specific,after the implementation of the policy,the policy effect may have spillover effect in space,that is,the policy will lead to the relocation of enterprises in the affected cities,which may migrate to the surrounding cities.At this time,enterprises in the cities in the control group may also be affected by the policy,that is,they move out of the cities in the treatment group due to the existence of the policy.At this point,the dependent variables within the control group may fluctuate.In this case,the results obtained by using the double difference method may deviate from the actual effect of the policy.Therefore,the general equilibrium effect can be discussed in future studies.