Analysing the co-benefit of environmental tax amidst clean energy development in Europe's largest agrarian economies

Environmental management and the circular economy: Analysing the role of environmental fiscal measures in promoting clean production and consumption in OECD countries

Pollution, material waste, and emissions cause environmental degradation. The public sector implements environmental interventions to reduce pollution and emissions and to make waste circular. Environmental fiscal interventions are crucial for reducing emissions, material waste, pollution, and unsustainable production and consumption. This study focuses on the role of environmental fiscal measures in promoting clean production and consumption in 22 OECD countries. Continuously Updated Efficient Generalized Method of Moments (CUE-GMM) and 2-step Efficient GMM methods are applied to panel data from 2000 to 2022. The empirical analysis reveals the positive impact of environmental protection expenditures, renewable energy adoption, and technological innovation on clean production and consumption. However, environmental taxes and credits to the private sector negatively impact and are ineffective and distortionary for the transition to clean production and consumption. The findings validate the public good theory that environmental protection expenditures promote clean production and consumption technologies. However, the Pigouvian tax theory is not valid for the OECD countries. This study suggests re-evaluating the existing environmental taxation framework. The findings imply that tax credits, environmental research and development expenditures, adopting renewable energy sources, and technology for green practices will promote responsible production and consumption in OECD countries.

Spatio-temporal investigation of economic growth and environmental quality nexus in EU countries: New guidelines regarding green goods and eco-tax

The issue of environmental degradation has become pertinent and the call for carbon neutrality has intensified in recent years. Achieving this target will require countries to meet the conditions of the sustainable development goals. To do this, the study applied spatiotemporal modelling and the generalized method of moments (GMM) to examine the nexus between economic growth (EG) and the load capacity factor (LCF) through environmental goods (ENG) and environmental tax (ENT) among European Union (EU) nations from 1995 to 2018. The findings demonstrate that spatial dependence leads to a change in EG and LCF that impacts the EG and LCF of the neighbouring countries. The study also found that there is a significant positive and bidirectional relationship between economic growth and load capacity factor. Moreover, the study revealed that a positive effect of ENG, ENT, REN and Human Capital Index (HCI) on EG, with a reducing effect from natural resource rents (NRR). Finally, HCI improves environmental quality, while ENG, ENT, REN and NRR degrade the environment. Our findings justify the need for EU countries and other developed nations to implement policies that will help achieve a green economic transformation.

The role of ICT investment, digital financial inclusion, and environmental tax in promoting sustainable energy development in the MENA region: Evidences with Dynamic Common Correlated Effects (DCE) and instrumental variable-adjusted DCE

His research investigates the interplay among investment in Information and Communication Technology [ICT], digital financial inclusion, environmental tax policies, and their impact on the progression of sustainable energy development within the Middle East and North Africa [MENA] region. Recognizing the distinctive hurdles impeding sustainable energy advancement, effective policy formulation and implementation in MENA necessitate a comprehensive understanding of these variables. Employing a Dynamic Common Correlated Effects [DCE] model alongside an instrumental variable-adjusted DCE approach, this study explores the relationship between ICT investment, digital financial inclusion, environmental tax, and sustainable energy development. The DCE model facilitates the analysis of dynamic effects and potential correlations, while the instrumental variable-adjusted DCE model addresses issues pertaining to endogeneity. The results indicate that both ICT investment and the promotion of digital financial inclusion significantly and positively impact sustainable energy development in the MENA region. Additionally, the study underscores the importance of environmental tax implementation in fostering sustainable energy advancement, highlighting the critical role of environmental policy interventions. Based on these findings, governmental prioritization of ICT investment and initiatives for digital financial service integration is recommended to bolster sustainable energy growth in MENA. Furthermore, the adoption of efficient environmental tax measures is essential to incentivize sustainable energy practices and mitigate environmental degradation. These policy recommendations aim to create a conducive environment for sustainable energy progression in the MENA region, contributing to both economic prosperity and environmental conservation.

The impact of Chinese foreign direct investment and environmental tax revenues on air degradation in Europe: a spatial regression approach, 2000-2020

This study analyzes air pollution through the effects of China's FDI in 27 European countries over a 20-year period, with a focus on the impact of environmental tax revenues (ETRs) and the environmental context in China. The relationship is estimated through spatial regressions that account for the presence of air pollutants in neighboring countries. The findings suggest that China's FDI in Europe does not contribute to air pollution but rather has a positive impact. The presence of environmental charges filters out non-polluting investments, which has a non-linear relationship with PM2.5 pollution rates. The study also concludes that air pollution is closely linked to the global environmental context, highlighting the positive effects of international agreements in the fight against climate change. Specifically, the study finds a link between China's efforts to address its polluting activities and their impact on European air quality.

Curbing methane emissions from Italian cattle farms. An agroeconomic modelling simulation of alternative policy tools

Methane (CH4) emissions from cattle farms have been prioritised on the EU agenda, as shown by recent legislative initiatives. This study employs a supply-side agroeconomic model that mimics the behaviour of heterogeneous individual farms to simulate the application of alternative economic policy instruments to curb CH4 emissions from Italian cattle farms, as identified by the 2020 Farm Accountancy Data Network survey. Simulations consider increasing levels of a tax on each tonne of CH4 emitted or of a subsidy paid for each tonne of CH4 curbed with respect to the baseline. Individual marginal abatement costs are also derived. Besides, to consider possible technological options to curb emissions, a mitigation strategy is simulated, with different levels of costs and benefits to appraise the potential impacts on the sector. Relevant reductions in operating income are foreseen, the most substantial in farm types and size classes characterised by lower levels of carbon productivity. The introduction of the mitigation strategy shows that the outcome in terms of mitigation potential, without undermining production level, highly depends on the implementation costs, but can also vary widely due to heterogeneous farms' economic performances. Policy implications are also derived.

Powering sustainable growth in West Africa: exploring the role of environmental tax, economic development, and financial development in shaping renewable energy consumption patterns

Over time, the economy's growth, financial development, and environmental taxes have become vital tools in countering ecological degradation and promoting clean energy. However, there needs to be a research gap in assessing these policies' collective impact on renewable energy adoption, especially in developing West African countries. This study addresses this gap by evaluating the effectiveness of these policies from 1990 to 2020, using the Generalized Method of Moments (GMM), fixed effect, and pooled Ordinary Least Squares (OLS) models. The Dumitrescu-Hurlin panel causality test reveals bidirectional causality between economic growth and renewable energy consumption, as well as between financial development and renewable energy use. Unidirectional causality is found from environmental tax to renewable energy consumption. GMM results highlight the positive influences of economic growth and environmental taxes on renewable energy consumption, while financial development negatively affects it. These outcomes are consistent with fixed effect and pooled OLS models. Sectorial heterogeneity analysis indicates better results for countries with strong institutions, advanced technology, and strict regulations. In conclusion, this study's insights can guide policies for sustainability in West Africa, leveraging economic growth, environmental taxes, and technology for effective renewable energy integration.

The impact of environmentally related taxes and productive capacities on climate change: Insights from european economic area countries

In a world increasingly threatened by climate change and its associated risks, there's an urgent need to actively seek solutions for environmental protection and sustainable economic development. Central to this effort is understanding the role of environmental taxes and productive capacities in shaping environmental outcomes. Focusing on countries within the European Economic Area (EEA), this research uses advanced second-generation econometric techniques to examine this relationship. The use of cross-sectional autoregressive distributive lag (CS-ARDL) and dynamic common correlated effects (DCCE) models allows for a robust examination of panel data and provides reliable results. The results reveal an inverted U-shaped relationship, or Environmental Kuznets Curve (EKC), between GDP growth and environmental degradation in the EEA economies. Furthermore, while our data reveal a significant negative correlation between environmental taxes and CO2 emissions, we find that productive capacities have a more significant impact on reducing these emissions. These findings call for further research into the effectiveness of policies to support productive capacities in achieving environmental protection goals in the EEA.

A step towards carbon neutrality in E7: The role of environmental taxes, structural change, and green energy

To achieve sustainable production and consumption patterns in the modern world, emerging countries are concentrating more on how economic variables may employ carbon neutrality targets appropriately. Using renewable energy, structural changes initiative, and imposing environmental taxes are all part of the plan to achieve the carbon neutrality goal in terms of reduced carbon emissions (CO₂), haze pollutants, and greenhouse gases (GHG). Environmental taxation, renewable energy, structural changes, trade openness, and foreign direct investment (FDI) are aspects taken into account in this study, along with the long-term viability of the natural ecology in the E7 (China, Turkey, India, Russia, Brazil, Indonesia, and Mexico) economies. The Driscoll Kraay fixed effect OLS technique and the Method-of-Moment quantile (MMQ) regression technique were adopted for the baseline analysis for the data span of 2000 to 2020. From the empirical analysis, it was discovered that environmental Tax, structure change, and renewable energy have a negative connection with carbon emissions for the understudy countries. Moreover, the pollutant haven hypothesis (PHH) was confirmed since the findings discovered a positively significant relation involving FDI and carbon emission. Similarly, trade openness was seen to have a positive connection with carbon emissions. Thus, it is concluded that effective environmental taxation, renewable energy enhancement, and structure changes mitigate pollution while trade openness and FDI inflow enhance carbon emission for the E7 economies. According to the results, rigorous environmental tax rules will enable enterprises to transition manufacturing to green and sustainable alternatives. Finally, the report recommends that transferring tax money to research and development of sustainable technology programmes will enable governments to meet the SDG-7 and SDG-13 objectives of the United Nations.

Is environmental sustainability transmissible? Transportation-based environmental taxation spillovers for sustainable development

Environmental sustainability investigation has been a hotly debated topic of the modern literature; however, past studies have primarily overlooked its transmissibility or spillover outreach across economies. Herein, we investigate the novel aspect of whether transportation-based environmental taxation spatially induces spillover impacts across Italy, Germany, and France over the 1994-2020 period by employing a simultaneous spatial equation with multi-country dynamic stochastic general equilibrium modeling (DSGEM) framework. Transportation-based environmental taxation of the domestic economy negatively impacts its own investment and consumption, while it impacts the economy of neighboring economies positively. Change in output and investment in the domestic economy can be well explained by the environmental volatility of the domestic economy, whereas the environmental volatility of neighboring economies does not contribute much to explain the change in investment and output of the domestic economy. Volatility in pollution discharge occurs more by environmental volatility in the neighboring economy than in the domestic economy, and validating that environmental sustainability is transmissible across regions and economies. It urgently calls for environmental protection policies integrated and coordinated across the countries and regions to spread and capitalize on environmentally and economically favorable and sustainable effects globally. Achieving the spatially transmitted positive environmental and economic outcomes would help strengthen the Sustainable Development Goals (SDG), with a particular focus on Climate Action (SDG13), Sustainable Production and Consumption (SDG12), and Affordable and Sustainable Energy for All (SDG7).

Green industrial transition: Leveraging environmental innovation and environmental tax to achieve carbon neutrality. Expanding on STRIPAT model

Anthropogenic global warming strategies on carbon mitigation are driven by encouraging green innovation and using carbon taxes, yet an empirical model to validate this is non-existing. Moreover, the existing stochastic effects by regression on population, wealth, and technology (STIRPAT) model has been found to lack policy tools on taxes and institutions that cut carbon emissions. This study amends the STIRPAT model with environmental technology, environmental taxes, and strong institutional frameworks to create a new model STIRPART(stochastic impacts by regression on population, affluence, regulation, and technology) to understand the factors impacting carbon pollution using the emerging 7 economies. Using data from 2000 to 2020, the Driscoll-Kraay fixed effects are employed in this analysis to conduct evidential tests of the impacts of environmental policies, eco-friendly innovations, and strong institutions. The outcomes indicate that environmental technology, environmental taxation, and institution quality decrease E7's carbon emissions by 0.170%, 0.080%, and 0.016%, respectively. It is recommended that E7 policymakers should adopt the STIRPART postulate as the theoretical basis for policies favoring environmental sustainability. The key contribution is the amendment of the STIRPAT model and the enhancement of the market-based mechanisms, such as patents, strong institutions, and carbon taxes, to enable environmental policy to be carried out sustainably and cost-effectively.

What is the role of resource tax in sustainable development? A firm-level analysis for China

While previous studies have recognized the importance of resource tax in environmental governance, we know relatively little about whether resource tax can get a win-win both in corporate financial performance (CFP) and corporate environmental performance (CEP). Using China's resource tax reform (RTR) policy in 2016 as a quasi-natural experiment and adopting a difference-in-differences (DID) strategy, we estimate the real effect of resource tax on CFP and CEP. The results show that RTR increases the financial performance of the regulated firms by 32.26% and the environmental performance by 46.15% compared to the non-regulated firms, indicating that resource tax can promote firms' sustainable development. Mechanism analysis shows that the effect of resource tax is mainly driven by firms' technological innovation and productivity improvement. Moreover, we further find that RTR performs better for firms with weaker tax burden-shifting ability and firms located in areas with poorer resource endowments. Overall, our study not only provides evidence for the Porter hypothesis from the perspective of resource tax, but also offers important policy implications for developing countries in their pursuit of sustainable economic and environmental development.