The article examines how China's low environmental tax rate hinders green technology innovation in resource-based industries. By analyzing the relationship between tax rates and pollution emissions, the study suggests that increasing the tax rate can promote both pollution reduction and technological innovation. The research shows that environmental externalities negatively impact green technology innovation and that the optimal tax rate has a non-linear effect on innovation. Increasing the environmental tax rate gradually is recommended to achieve both pollution reduction and technological advancement in China's resource-based industries.