Can environmental taxes and green-energy offer carbon-free E7 economies? An empirical analysis in the framework of COP-26.

Abstract

The main cause of environmental degradation is carbon emissions, which puts environmental sustainability in jeopardy. This ecological worry, the obligation for which falls on all economic actors, has not gone undetected, and so in 2021, the Glasgow Climate Pact (COP: 26) was organized, with the primary aim of decreasing global carbon emissions. Because the Post-Glasgow Agreement goals represent a significant challenge to achieving ecological responsibility, pressure is applied to the participating nations. However, earlier literature lacked sufficient investigation of factors useful for the mitigation of carbon emissions in E7 (China, Turkey, India, Russia, Brazil, Indonesia, and Mexico) economies. Hence, we aim to fill this research vacuum by predicting the impact of clean fuels and cooking technology availability, renewable energy, and environmental taxes on E7 economies' carbon emissions from 2000 to 2020, while taking urbanization and population expansion into account. Evaluation is done using four different cross-sectional dependence (CSD) methods, as well as unit root tests (CIPS and CADF), cointegration analysis (Westerlund and Kao), and the Driscoll-Kraay and quantile-on-quantile long-run factor estimate methods. The long-run analysis revealed from our findings that environmental tax, renewable energy, and access to clean fuels and technologies for cooking decrease carbon emission for the E7 economies. On the other hand, urbanization and population growth enhance emissions for the E7 economies. Finally, our results hold up under a variety of policy interpretations that would aid in reducing carbon emissions and their negative effects on the environment.