Journal
SUSTAINABILITY
Volume 13, Issue 21, Pages -Publisher
MDPI
DOI: 10.3390/su132111708
Keywords
carbon tax; green-innovation-inducing effect; progressive tax rate
Funding
- Natural Science Foundation of China [71874068]
- Social Science Foundation of China [17CJY023]
- National Natural Science Foundation of China [72074095]
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This study introduces a carbon tax design that links carbon taxes with low-carbon technology of enterprises to encourage green innovation and mitigate global warming. The research found that a unit progressive carbon tax is effective in promoting green innovation by encouraging enterprises to participate, with a diminishing effect of increasing tax rates.
The major global economies are facing increasing pressure to reduce their carbon emissions. Introducing environmental policy instruments to stimulate green innovation is key to mitigating global warming. We propose a carbon tax design with a typical green innovation orientation that links carbon taxes with the low-carbon technology (LCT) of enterprises and imposes a progressive tax on heterogeneous enterprises with LCT stock to encourage green innovation. This study used a dynamic evolution game model based on the Stackelberg model of heterogeneous enterprises with LCT stock to analyze the green-innovation-inducing effect of unit progressive carbon taxes. A unit progressive carbon tax could encourage enterprises to participate in green innovation, regardless of their initial green innovation willingness. The progressive tax rate was more effective than a fixed rate for stimulating green innovation by all enterprises. There was a marginal diminishing effect of increases in the tax rate. An increase in the innovation cost coefficient of enterprises reduced the green-innovation-inducing effect of the unit progressive carbon tax. Increasing the tax rate was effective only under normal circumstances. A decline in the carbon reduction in enterprises also reduced the green-innovation-inducing effect of the unit progressive carbon tax. Furthermore, increasing the tax rate when the carbon reduction amount was extremely low caused enterprises to abandon green innovation.
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