With the rapid economic growth, environmental problems have become a significant bottleneck restricting the high-quality development of China’s economy. In the fiscal decentralization system, balancing economic growth and environmental governance is an issue that needs to be paid attention to in fiscal policy. This paper studies the impact of fiscal decentralization on the environmental policy in China. We incorporate the central and local government structure into a standard environmental dynamic stochastic general equilibrium (E-DSGE) model. The economy was featured with multiple-level governments where the local governments implement fiscal policies through the trade-off between pursuing economic growth and environmental governance. The results indicate that implementing a carbon emission tax is not conducive to economic growth but helps reduce environmental pollution. Second, deepening fiscal decentralization has heterogeneous effects on central and local fiscal expenditures. Deepening fiscal decentralization strengthens the positive externality of local government expenditures to output, but it also leads to further deterioration of environmental pollution. The positive externality of the central government expenditures will weaken with the increase in fiscal decentralization, but it is conducive to improving the quality of the environment. Third, deepening fiscal decentralization is conducive to improving social welfare and alleviating environmental pollution. If the local government fiscal expenditures are biased toward environmental governance expenditures, this is beneficial to improve social welfare and the quality of the environment.

This paper investigates the impacts of migration characteristics on rural migrant households’ farmland use arrangements in China. The results reveal that trailing migration, duration of migration and the proportion of co-migrants have a significant effect on the probability of rural migrant households’ farmland abandonment. Commercial employment migration has a negative impact on the abandonment of farmland by migrant families. Migrant households are most likely to choose farmland abandonment in the western and middle regions of China and in small farmland areas. In the eastern region, and first tier and second tier Chinese cities, migrant households are more inclined to choose farmland transfer. Household earnings increase, which induces households to gradually give up the cultivation of farmland or to transfer farmland, constituting a mechanism in Chinese households’ farmland use arrangements. Notably, the consolidation of arable land should be the focus in areas of low economic development. Furthermore, an effective mechanism for the transfer of farmland should be established.