Environmental Taxes and Carbon dioxide Emission in EU Countries: A Panel VAR Approach

Authors : Onur POLAT

Pages : 20-33

View : 9 | Download : 4

Publication Date : 2019-12-30

Article Type : Research Paper

Abstract :In this study, we analyze propagation mechanisms between environmental taxes and carbon dioxide emission in EU states by employing the panel VAR insert ignore into journalissuearticles values(PVAR); model. In this respect, we use annual data that consists of GDP insert ignore into journalissuearticles values(current US$ per capita);, CO2 emission insert ignore into journalissuearticles values(metric ton per capita);, energy use insert ignore into journalissuearticles values(kg of oil equivalent per capita); and environmental tax revenues insert ignore into journalissuearticles values(proportion of GDP); from 1995 through 2014 for 24 EU countries in the PVAR model and identify short/long run transmission mechanisms between the variables. Cross-sectional dependence is tested by the Peseran’s CD test and the second-generation panel unit root test is carried out to determine stationarity of the variables. The empirical findings of the study underline the significance of environmental taxes in mitigating CO2 emission and accordingly propose the environmental taxes in internalizing negative externalities along with other policy tools. Even though, various policies should be applied simultaneously and globally to mitigate the deleterious effects of green gas emissions for humanity and the environment along with environmental taxes.
Keywords : Çevre Vergileri, CO2 emisyonu, Panel VAR