Effects Of Environmental Taxes Research Articles

Assessing the Impact of Environment Tax on Carbon Emissions of African Countries

Over the past decade, African nations have seen substantial economic growth and rising global influence, yet carbon emissions in the region have increased since 1995. In response, several African countries have implemented environmental taxes to curb emissions and prevent environmental degradation. This study investigates the impact of environmental taxes and economic growth on carbon emissions in AFRICA-13 countries, using nonlinear quantile regression, FMOLS, and DOLS methods on panel data from 1995 to 2023. The findings reveal a significant relationship between environmental taxes, economic growth, and carbon emissions. Specifically, the negative and significant coefficients for environmental taxes suggest that higher taxes are effective in reducing carbon emissions. On the other hand, the positive and significant coefficients for manufacturing and national income – indicators of economic growth – indicate that as economic growth increases, so do carbon emissions, aligning with the Environmental Kuznets Curve (EKC) hypothesis. While AFRICA-13 countries have implemented policies to address environmental challenges, the link between economic growth and increased emissions underscores the ongoing challenge of balancing development with environmental sustainability. This study provides new insights into the effectiveness of environmental taxes, demonstrating that they serve as effective counter-incentives for polluting activities and contribute to emission reductions. The experiences of the AFRICA-13 countries offer valuable lessons for global policymakers, illustrating how fiscal policy can be leveraged to rebalance the energy mix and promote the use of cleaner alternative energy sources while addressing the dual objectives of economic growth and environmental protection.

The Effect of Environmental Tax - Spending Mix on Province Air Quality

The provincial government in Indonesia has been mandated to collect environmental-related taxes in recurrent vehicle taxes, vehicle transfer taxes, and gasoline taxes. These vehicle-related taxes have been the dominant type for the provincial government. Yet, the environment-related spending has been relatively low, within 1-3% of total expenditures. This study examines to what extent such environmental tax–spending mix affects the environmental outcomes measured by the air quality index. The novelty of this study comes in using detailed environmental-related tax revenues at the sub-national level and providing a context of the large developing country in a decentralized economy – Indonesia – as a case study. Our study finds the link between environmental tax in the case of the vehicle recurrent tax and gasoline tax in improving air quality and environmental quality index, respectively. But on the spending side, there is no evidence that provincial environmental spending may improve the air or environmental quality index. Nonetheless, we found a correlation between the vehicle transfer tax revenues and the share of province environmental spending, implying that environmental tax revenues, to some extent, correspond to the related provincial expenditures on environmental protection. This study signals the need also to expand environmental spending to complement existing environmental tax policy at the provincial level.JEL Classification: H71, H76, Q53How to Cite:Qibthiyyah, R. M., & Zen, F. (2023). The Effect of Environmental Tax Spending Mix on Province Air Quality Index. Signifikan: Jurnal Ilmu Ekonomi, 12(2), 221-230. https://doi.org/10.15408/sjie.v12i2.32395.

The effect of environmental taxes and economic growth on carbon emission in G7 countries applying panel kink regression

This research aims to investigate an apposite point (threshold point) for environmental tax levels in the business sector, especially in the instance of power plants in order to effectively reduce carbon emissions. The G-7 countries have been focused upon panel kink regression data from 1994 to 2020. Their findings denote that increasing environmental tax rates substantially reduced carbon emissions when the tax rate is set below the optimal point, and that implementing environmental policy through environmental taxation mechanisms has the potential for incentives for various economic sectors, particularly power plants, to reduce carbon emissions. However, after the G-7 governments implement a high tax rate on carbon activity they are likely to face the opposite effect, resulting in an increase in carbon emissions as a result of high company taxes (power plants). This high tax implementation will likely have an effect on their income. Due to the lack of any incentives, businesses have elected not to reduce carbon emissions, because less expenses will provide them with greater benefits.

Do Environmental Taxes Affect Carbon Dioxide Emissions in OECD Countries? Evidence from the Dynamic Panel Threshold Model

The latest decades have been marked by rapid climate change and global warming due to the release of greenhouse gas emissions into the atmosphere. Environmental taxes have emerged as a cost-effective way to tackle environmental degradation. However, the effectiveness of environmental taxes in reducing pollution remains a topic of ongoing debate. The purpose of this paper is to examine empirically the effects of various environmental tax categories (energy, pollution, resource and transport) on CO2 emissions in 34 OECD countries between 1995 and 2019. The dynamic panel threshold regression developed by Seo and Shin (2016) is implemented to assess whether the impact of environmental taxes on CO2 emissions depends on a given threshold level. The locally weighted scatterplot smoothing analysis provides evidence for a nonlinear association between environmental taxes and CO2 emissions. The analysis indicates the existence of one significant threshold and two regimes (lower and upper) for all environmental tax categories. The dynamic panel threshold regression reveals that the total environmental tax, energy tax and pollution tax reduce CO2 emissions in the upper regime, i.e., once a given threshold level is reached. The threshold levels are 3.002% of GDP for the total environmental tax, 1.991% for the energy tax and 0.377% for the pollution tax. Furthermore, implementing taxes on resource utilization may be effective but with limited environmental effects. Based on the research results, it is recommended that countries in the OECD implement specific environmental taxes to reduce greenhouse gas emissions.

The effects of environmental taxation on stock returns of renewable energy producers: Evidence from Turkey

The current study investigates if environmental taxation in Turkey significantly impacts stock returns of renewable energy producers. Renewable energy-related firms trading Istanbul Stock Exchange and the overall energy stock index are selected and analyzed using time series methods. Results generally confirm the long-term effects of taxation on renewable energy stock prices. This study demonstrates that variations in national environmental regulations and energy taxation result in significant variations in energy stock performance. It is also found that foreign direct investments in Turkey negatively impact energy stock markets. Implications are provided at the end of this study.

Effect of environmental taxes on environmental innovation and carbon intensity in China: an empirical investigation

Environmental taxes are deemed to be an important carbon mitigating factor and also encourage the producers to adopt environmentally friendly technologies. Therefore, the main objective of the analysis is to evaluate the environmental taxes on environmental innovations and carbon intensity in China. The novel quantile autoregressive distributed lag (QARDL) is applied to investigate the model empirically. From the results, we confer that the short and long run estimated coefficients of environmental taxes are positive and significant at most quantiles in the environmental innovation model, implying that the higher the rate of environmental taxes, the higher the rate of environment-related innovations. However, the estimates of environmental taxes are significant and negative in both short and long run at more than half quantiles in the carbon emissions model, suggesting the positive role of environmental taxes in reducing carbon emissions. In general, our findings imply that an increase in environment-related taxes helps reduce carbon intensity and promote environmental innovation in China. The study suggests that policymakers in China should promote environmental innovation and expand the environmental tax base to achieve the objective of carbon neutrality.

Green technology upgrading choice in a competitive setting: the effect of environmental tax

ABSTRACT This research considers a supply chain consisting of a regulator and two symmetric firms where the regulator influences the market by imposing a tax on firms’ environmental pollutant emissions. A price competition model is proposed to examine the equilibrium solutions that the two firms can reach in their technology upgrading process, and the effect of the environmental tax is evaluated. The two firms’ Nash equilibrium solutions regarding their technology improvement decision show that there is no asymmetric equilibrium. The decision to upgrade or not upgrade may arise in equilibrium, depending on the technology’s fixed cost. Besides, a prisoner’s dilemma may arise when the two firms do not upgrade their technology, and multiple equilibria may arise when the fixed cost incurred is at a medium level. Technology improvement decision is the dominant strategy when either prisoner’s dilemma arises or multiple equilibria arise for the two firms regardless of whether the environmental tax is exogenous given or not. In addition, firms’ reactions to environmental tax may be non-monotone. However, the role of the tax on firms’ improvement decisions is limited when the regulator further increases the tax. Finally, the optimal tax level for the regulator that can maximise welfare is obtained.

Https://revistaft.com.br/the-impact-of-fiscal-policies-and-incentives-on-sme-sustainability-and-financial-performance/

The studies reviewed underscore the significant impact of fiscal policies and government incentives on the sustainability and financial performance of small and medium-sized enterprises (SMEs). Tax deductions and targeted incentives play a crucial role in alleviating financial pressures, enabling better resource management, and fostering growth and competitiveness. The research by Picas et al. (2021) reveals how various fiscal incentives and government support influence the profitability of Portuguese SMEs, with findings indicating that while tax incentives positively affect profitability, some government incentives do not have substantial impacts. Bhalla, Kaur, and Sharma (2022) explore the effects of India’s Goods and Services Tax (GST) reform, demonstrating improvements in financial performance through reduced borrowing costs and better working capital flow. Wang, Shen, and Tang (2021) analyze China’s VAT reform, highlighting its role in enhancing firms’ financing capabilities by decreasing borrowing costs and promoting credit availability. Zhao, Li, and Li (2022) focus on the effects of environmental taxes on high-tech enterprises, finding that these taxes drive green innovation but have varied impacts depending on firm ownership type. Finally, Bartolacci, Caputo, and Soverchia (2019) provide a bibliometric analysis of research trends in SME sustainability and financial performance, identifying key research themes such as innovation, corporate social responsibility, and green management. Collectively, these studies emphasize the need for targeted fiscal policies and effective tax management to support sustainable business development. They offer valuable insights for policymakers and business leaders to craft strategies that enhance SME growth and innovation amidst financial challenges.

Study on the Threshold Effect of Environmental Tax on Green Innovation

Based on the panel data of 30 provinces in China from 2009 to 2019, this paper studies the spatial spillover characteristic threshold characteristics of green innovation based on the threshold effect model. The study found that: First of all, environmental tax has a threshold effect on regional green innovation, that is, when the environmental tax is less than the threshold value of 0.0145, the environmental tax can significantly increase the regional green innovation; when the environmental tax reaches the threshold value of 0.0145, the environmental tax cannot effectively improve the regional green innovation. Clarifying the relationship between the two will help to reveal the policy effect of environmental tax in a more comprehensive and in-depth manner, and is conducive to promoting the coordinated development of regional economy and environment, technological innovation and high-quality economic development.

Effectiveness of environmental taxes and environmental stringent policies on CO2 emissions: the European experience

Effectiveness of environmental taxes and environmental stringent policies on CO2 emissions: the European experience

The effects of environmental tax on Ecological Footprint and Carbon dioxide emissions: a nonlinear cointegration analysis on Turkey.

This article presents a nonlinear analysis in Turkey on the effect of an environmental tax (ET) on the ecological footprint (EFP) and carbon dioxide (CO2) emissions. In the literature, most of the studies examining the effects of environmental taxes (ETs) on environmental degradation (ED) have used linear methods. The number of studies examining this relationship with nonlinear methods is few. However, there is no study examining the long-run effects of ETs on the EFP, which is one of the most important indicators of ED, using nonlinear analysis. This study contributes to the literature by investigating the long-run effects of ETs on EFP and CO2 emissions in Turkey by nonlinear analysis. Therefore, the model consisting of annual data for the period 1994–2019 was estimated by Dufrénot et al. (2006) nonlinear cointegration test. According to the estimation results obtained, ETs do not have any long-run effects on EFP and CO2 emissions. Accordingly, it can be concluded that ETs in Turkey do not affect preventing ED.

Boon or bane? On productivity and environmental regulation

As climate change has gained more attention in the last decade, effects of environmental regulation on productivity are important to design green tax reforms. This study examines the impacts of environmental taxes and spillovers on technical efficiency, using data on Central European manufacturing firms, from 2009 to 2017. The results highlight strong effects of environmental taxation on productivity. Besides, downstream energy taxation does not affect productivity, while upstream taxes decrease technical efficiency. Downstream pollution taxation decreases productivity, whereas upstream taxation spurs technical efficiency. This study contributes to the literature by investigating heterogeneous tax effects across industries, involving tax spillovers and considering endogeneity issues.

Pollute less or tax more? Asymmetries in the EU environmental taxes – Ecological balance nexus

This paper examines the impact of environmentally related taxes on environmental performance in the EU-15 countries during the period of 1995–2016 by utilizing an innovative non-linear model, which is the panel smooth transition regression (PSTR) model. Although the effectiveness of environmental taxes has been discussed before, the potential effects of these taxes on ecological balance sheets as a measure to reflect human pressures on the environment/ecosystem have not been fully investigated. This paper, therefore, deals with total ecological balance and its main components, which are based on the major types of ecologically productive areas such as cropland, grazing land, forest area, and fishing grounds. The results indicate that revenues from environmentally-related taxes as a share of GDP significantly lower the ecological deficits after exceeding a certain threshold level, but not cropland balance accounts. Thus, well-designed environmental taxes on the optimal level have the potential to reduce environmental problems/ ecological imbalance, if not implemented in conjunction with policies such as tax exemptions, refunds or tax allowances that limit their impact.

Assessment of the Dependence of GHG Emissions on the Support and Taxes in the EU Countries

The reduction of GHG emissions is one of the priorities of the EU countries. The majority of studies show that financial support and environmental taxes are one of the most effective measures for the mitigation of the negative consequences of climate change. The EU countries employ different environmental support measures and environmental taxes to reduce GHG emissions. There is a shortage of new studies on these measures. The aim of the present study is to compare the effectiveness of the environmental support measures of the EU countries with the effectiveness of environmental taxes in relation to the reduction of GHG emissions. This study is characterized by the broad scope of its data analysis and its systematic approach to the EU’s environmental policy measures. An empirical study was performed for the EU countries with the aim of addressing this research problem and substantiating theoretical insights. A total of 27 EU member states from 2009 to 2018 were selected as research samples. The research is based on a cause-and-effect relationship, where the factors affecting environmental pollution (environmental taxes and subsidies) are the cause, and GHG emissions are the effect. Statistical research methods were used in the empirical study: descriptive statistics, the Shapiro–Wilk test, one-way analysis of variance (ANOVA), simple regression and cluster analysis. The results show that the older member countries of the EU, which had directed the financial measures of environmental policy towards a reduction in energy consumption, managed to achieve a greater reduction in GHG emissions compared to the countries which had not applied those measures. The Central and Eastern European countries are characterized by lower environmental taxes and lower expenditure allocated to environmental protection. The countries with a higher GDP per capita have greater GHG emissions that the countries with lower GDP per capita. This is associated with greater consumption, waste, and energy consumption. The study conducted gives rise to a discussion regarding data sufficiency in the assessment and forecasting of GHG emissions and their environmental consequences.

The Effectiveness of Environmental Taxes in Reducing CO2 Emissions in Passenger Vehicles: The Case of Mediterranean Countries.

The transport sector is the biggest source of CO2 emissions in Europe. It is responsible for over a quarter of all greenhouse gas emissions. Passenger vehicles, alone, account for nearly 41% of these emissions, resulting in human health impacts. To meet the Paris climate commitments, cars and vans should be decarbonized until 2050. Such a transformation requires general changes, such as how the vehicles are owned, taxed, and driven. The European Federation for Transport and Environment revealed that Mediterranean countries tend to emit less per vehicle compared to the northern and central Europeans. Intriguingly, this does not necessarily correspond to motorization rates. In this article, we assess whether the observed reductions in CO2 emissions in the Mediterranean countries can be attributed to vehicle taxation on CO2 emissions. We apply panel data econometric techniques using data on annual registrations from 2008 to 2018 and model the demand for new-vehicle purchases and their responsiveness to changes in both CO2-based taxation and circulation tax. Our results show the determinants of new-vehicle demand and the change in the emissions rate in each country under the taxation currently adopted. We found that fiscal policies can have an important role in reducing the emission in the Mediterranean countries.

The effects of environmental taxes on environmental pollution and unemployment: A panel co‐integration analysis on the validity of double dividend hypothesis for selected African countries

AbstractIn this study, the validity of the double dividend hypothesis for several African countries (Cameroon, Ivory Coast, Mali, South Africa, and Uganda) is investigated for the period of 1994–2017. The double dividend hypothesis claims that, in addition to reducing environmental pollution, environmental taxes can also increase employment. In this study, the validity of this hypothesis is examined with panel co‐integration and long‐run estimators. According to the findings obtained, environmental taxes increased environmental degradation and unemployment in Cameroon, environmental degradation in the Ivory coast, environmental degradation and employment in Mali, environmental restoration in South Africa and employment in Uganda. When the individual results obtained from the study are evaluated in general, it can be said that the double dividend hypothesis is not valid for African countries. The study proposes that taxation should be used as a financial incentive rather than a command‐and‐control policy to combat unemployment and environmental degradation.

Tax elasticity of demand for plastic: the cause of plastic pollution in Ghana

ABSTRACT Seemingly overlooked causes of inefficiencies in environmental fiscal reforms (EFRs) on plastic waste management are biased tax policies, which include indirect subsidization of plastic waste. With most developing countries grappling with plastic waste, it is paradoxical that they allow considerable tax exemptions on plastics, thereby ignoring the potential environmental damage caused by plastic pollution. This study investigates whether tax elasticity of plastic demand incentivizes unnecessary plastic consumption and subsequently plastic pollution, while accounting for the effect of tax exemptions. First, a simple theoretical model is developed to characterize the tax elasticity of plastic demand. Next, by isolating the attenuating effect of import tax exemptions, both the partial adjustment model and unrestricted error correction model, yield tax-inelastic demand for plastic in the long – and short-run, and speed of adjustments to the long-run equilibrium are estimated at 78% and 88%, respectively. Higher economic activities elicit higher long-run importation of plastic materials, with the effect of environmental tax and exemption being inconsequential. These results emphasize the need for government to embark on extensive restructuring of EFRs to ensure that optimal tax rates are applied on imports and efficient structures of tax exemptions are considered, while tightening possible channels of tax rebating by importers.

An assessment of the environmental sustainability corridor: Investigating the non‐linear effects of environmental taxation on CO2 emissions

AbstractThe effectiveness of environmental taxes for achieving carbon abatement has been subject to important debates on the sustainable development pathway. Theoretically, it is expected that environmental taxation (ERT) can reduce carbon emissions by enhancing innovation and energy efficiency that are the main drivers of environmental sustainability. The purpose of the study is to investigate the non‐linear effects of ERT on carbon dioxide (CO2) emissions by controlling environmental technologies, patens and economic growth within the limitation of the available longest data set covering the period of 1994–2015. The study employs the panel smooth transition regression approach, which determines the threshold levels endogenously, by observing the lower and higher integration levels of countries through globalization as a transition variable. The empirical findings recommend that ERT decreases CO2 emissions at higher levels of globalization. The non‐linear effect of environmental‐related technologies and patents on CO2 emissions is also favourable at higher levels of globalization.

환경세 부과가 근해어업 비용에 미치는 영향 추정

환경세 부과가 근해어업 비용에 미치는 영향 추정

The Effects of Environmental Taxes on the Development of Recycling Technologies

The Effects of Environmental Taxes on the Development of Recycling Technologies