Can green tax policy promote China's energy transformation?— A nonlinear analysis from production and consumption perspectives

This study explores the relationship between green tax policy and energy transformation from the perspective of energy consumption and energy production. The green tax policy is represented by calculated Green Tax Intensity (green tax revenue/local tax revenue). Panel smoothed transition regression (PSTR) model is used to test the impact of green tax policy on energy transformation and determine the threshold. The results show that the effect of green tax policy on energy transformation is nonlinear. From the perspective of energy consumption, green tax policy positively affects energy consumption transformation, but this positive effect diminishes as GTI increases. In the view of energy production, the results show that when GTI is slightly less than 0.2524%, the effect of green tax policy on the energy production transformation is optimal, and the impact coefficient shows a “Z” shape. In addition, the heterogeneity analysis shows that the regions where green tax policy has a significant positive impact on energy transformation are mainly located in southern China. However, there is no such promotion effect in most parts of the north. Therefore, policymakers should formulate differentiated tax policies. On the whole, China's current GTI should not be excessively high to prevent the “green paradox”.