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

• Published in: Environmental science and pollution research international Vol. 30; no. 44; pp. 99900 - 99912
• Main Authors: Youssef, Adel Ben, Dahmani, Mounir, Mabrouki, Mohamed
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer Berlin Heidelberg 01.09.2023; Springer Nature B.V; Springer Verlag
• Subjects: Aquatic Pollution; Atmospheric Protection/Air Quality Control/Air Pollution; Carbon Dioxide; Carbon dioxide emissions; Climate Change; Cross-Sectional Studies; Earth and Environmental Science; Ecology, environment; Economic Development; Economics; Economics and Finance; Ecotoxicology; Emissions; Environment; Environmental Chemistry; Environmental degradation; Environmental Health; Environmental impact; Environmental Kuznets curve; Environmental protection; Environmental tax; Humanities and Social Sciences; Life Sciences; Research Article; Sustainable development; Taxation; Taxes; Waste Water Technology; Water Management; Water Pollution Control; Productive capacities; European economic area countries; CS-ARDL; Environmentally related taxes; Environmental degradation; DCCE
• ISSN: 1614-7499; 0944-1344; 1614-7499
• DOI: 10.1007/s11356-023-29442-4

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.