Study on the Impact of Local Government Debt on Carbon Emissions
DOI:
https://doi.org/10.71222/ey8h7s65Keywords:
local government debt, carbon emission, fiscal system reformAbstract
The continuous expansion of local government debt, while promoting regional economic growth, may also have an externality impact on the resource and environmental system, especially exacerbating the carbon emission problem. Based on the panel data of 264 prefecture-level cities from 2006 to 2020, this paper constructs a fixed-effects model to systematically explore the mechanism of the impact of local government debt on urban carbon emission intensity and its heterogeneous performance. The empirical results show that local government debt level significantly and positively affects carbon emission intensity, and debt expansion exacerbates carbon emission pressure to a certain extent. Further robustness tests show that this conclusion holds across cities with different emission levels, and is particularly significant in high-emission regions. Subgroup analyses find that the driving effect of debt on carbon emissions is stronger in general prefectural cities compared to municipalities and provincial capitals, while the effect is weakened after the fiscal system reform in 2014, when institutional regulation is beginning to take effect. This paper enriches the micro-empirical research on the environmental consequences of fiscal behaviour and provides empirical evidence for understanding the relationship between local fiscal expansion and low-carbon development goals. The findings have important policy implications for optimising local debt management and building green fiscal governance mechanisms.
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