Search Results (6)

Water supply systems (WSS) face various threats such as climate change, declining freshwater availability, and over-extraction of groundwater. To improve the resilience and sustainability of WSS, both technological innovation and effective institutional and economic mechanisms are required. This study evaluates China’s recent water resource fee-to-tax reform as a quasi-natural experiment. It analyzes panel data from 222 prefecture-level cities between 2012 and 2023 and applies a multi-period difference-in-differences model to assess the impact of this reform on water use structure and efficiency. The two main research goals are to examine whether the reform has enhanced the structural resilience of WSS in terms of the shift from groundwater dependence to surface water, and whether it has improved water use efficiency to ensure sustainable water use. Our results show that the reform significantly reduced reliance on groundwater and increased the proportion of surface water use, thereby enhancing the structural resilience of urban water supply systems. Further analyses confirm that these effects are most pronounced in eastern and central regions, where water stress is higher. On the other hand, while the reform improved water use patterns, its positive impact on water use efficiency remains limited due to the current tax design. Overall, our research results demonstrate how fiscal instruments can be leveraged to improve sustainability of WSS. They provide policy insights for strengthening resilience of WSS against resource scarcity and environmental risks. Full article

The long-standing, unrestrained utilization of energy resources by China’s manufacturing sector has created irreversible obstacles to regional sustainable development. Consequently, the Chinese government has implemented a water resource tax policy in certain regions, with the aim of compelling manufacturing enterprises to adopt green and energy-saving innovations. This study used panel data from Chinese manufacturing companies listed on the A-share market from 2009 to 2020 and employed a double machine learning model to explore whether the water resource fee-to-tax reform can compel enterprises to enhance their tripartite green energy-saving innovation drive. These innovations consist of vision-driven and mission-driven green energy-saving technological innovations and green management energy-saving innovations. Following a quasi-natural experiment, our findings revealed the following: (1) The water resource fee-to-tax policy promoted the internal coupling coordination of the triple-driven system. (2) The policy compelled progress in mission-driven green energy-saving technological innovations and green energy-saving management innovations but hindered vision-driven green energy-saving technological innovations. (3) Within the internal systems of manufacturing enterprises, green energy-saving management innovations play a positive mediating role between the water resource fee-to-tax policy and the mission-driven green energy-saving technology innovation subsystem, but they lack a similar positive mediating mechanism for the vision-driven green energy-saving technology innovation subsystem. (4) The counterfactual framework verified that the mechanistic pathway “water resource fee-to-tax → green energy-saving management innovation → mission-driven/vision-driven green energy-saving technological innovation” could be further extended to other manufacturing enterprises not currently under policy compulsion. (5) In the interaction system between manufacturing enterprises and external markets, the development of marketization and financial technology positively regulated the promoting effect of the water resource fee-to-tax policy on mission-driven green energy-saving technological innovations and green energy-saving management innovations, but it did not have a similar effect on vision-driven green energy-saving technological innovations. Full article

Water resources are a fundamental natural and strategic economic resource and are closely related to high-quality economic and societal development. This paper uses the pilot implementation of the water resource tax reform to explore the impact of that reform on the green innovation and total factor productivity of enterprises. The study sample includes data for high water-consuming A-share listed enterprises in Shenzhen and Shanghai, China, from 2007 to 2021; the double-difference method was used for the analysis. Study findings indicate that replacing water resource fees with taxes significantly improves the green innovation level and total factor productivity of enterprises. Green innovation has a significant partial mediating effect between the water resource tax reform and total factor productivity. The water resource tax reform promotes green innovation in enterprises, enhancing total factor productivity. When considering different types of enterprise property rights, the economic effect of the water resource tax reform is more pronounced in non-state-owned enterprises, compared to state-owned enterprises. This paper provides empirical evidence for expanding the pilot scope of the water resource tax reform. Full article

China is taking measures to minimize the negative impact of the long-term extensive water use model on the water environment. The large number of zombie enterprises with high energy consumption and low energy efficiency in highly water-consuming industries is one of the important reasons for the water resource governance plight of China. Based on the quasi-natural experiment of water resource tax reform from 2016 to 2020, this paper uses the panel data of listed companies to quantify the impact of water resource tax on the zombification of high water consumption enterprises in this paper. The results show that the zombie degree of high water consumption enterprises after the implementation of the water resource fee to tax reform has become significantly higher, and this conclusion remains stable after a series of tests. The conclusion of this paper has major implications regarding sustainably developing zombie enterprises and highly water-consuming industries in terms of policy. Full article

With the development of China’s industrial economy and urbanization, water pollution has become serious and gradually exposed to the public. The pollution fee policy is an important tool to force enterprises to reduce pollution. This study used the panel data of manufacturing enterprises during 2006–2013 and the multiperiod difference in differences (DID) method to systematically analyze the impact of water pollution fee reform on emissions of manufacturing enterprises in China. In general, enterprises facing improved pollution fee collection standards reduce COD emissions by approximately 4.1%. However, significant location heterogeneities are captured in China. The rising water pollution fees have promoted the emission reduction of enterprises in northern China and resource-based cities, but the effect is not significant in southern China and nonresource-based cities. Furthermore, the mechanism analysis shows that enterprises mainly reduced emissions through terminal treatment and reducing production. This study provided micro evidence for research on the effect of pollution fee reform and supplied a reference for the improvement of the environmental protection tax system in China. Full article

To better understand farmers’ refusal to pay agricultural water fees under the current policy in rural China and their corresponding negative emotions, this paper applies mental accounting, a behavioral economics framework, to explore how the governmental policies of reform of rural taxes and fees, direct agricultural subsidy programs, and agricultural water fees individually influence farmers’ decisions in paying the agricultural water fees. Using fieldwork data from 577 farmers and 20 water managers in Sichuan, we explore farmers’ information processing regarding paying agricultural water fees via three sequential mental accounting processes, with the associated underlying principles and measures behind each process. We find that the information processing in three mental accounting scenarios related to the agricultural water fee elucidates farmers’ observed behaviors in rural China. Generally, in the three mental accounting scenarios, two conditional intuitive expectations and nine conditional intuitive preferences are formed; however, the conditions of those expectations or preferences cannot be matched with the facts due to the reform of rural taxes and fees, the direct agricultural subsidy programs, and the internal attributes of agricultural water fee, which interpret those negative behaviors in rural China. Additionally, this paper offers a view into how previous policies create negative psychological externalities (such as farmers’ psychological dependence on the government) through mental accounting to negatively influence agents’ subsequent decision-making; it highlights the significance of underlying mental factors and information processing of negative behaviors in policymaking for managing or conserving common pool resources. Full article