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Can environmental tax promote renewable energy consumption? — An empirical study from the typical countries along the Belt and Road

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  • Fang, Guochang
  • Yang, Kun
  • Tian, Lixin
  • Ma, Yuting

Abstract

This paper explores the effects of environmental tax on renewable energy consumption. Fifteen typical countries along the Belt and Road are selected to build panel autoregressive distributed lag model based on the data of 1998–2019 years. According to pooled mean group estimator, the short-term impact of environmental tax on renewable energy consumption in these countries is negative. In the long run, for 1% increase in environmental tax, renewable energy consumption will increase by 1.201%. Dumitrescu-Hurlin panel causality test confirms the existence of bidirectional causality between environmental tax and renewable energy consumption. For the canonical cointegration regression approach, 1% increase in environmental tax, the share of renewable energy consumption in the final energy will increase by 0.021%. The robustness of the long-term relationship is tested by fully modified ordinary least squares and dynamic ordinary least squares. Linearity tests reveal the nonlinear impact of environmental tax on renewable energy consumption. The paths of environmental tax to improve environmental quality are put forward.

Suggested Citation

  • Fang, Guochang & Yang, Kun & Tian, Lixin & Ma, Yuting, 2022. "Can environmental tax promote renewable energy consumption? — An empirical study from the typical countries along the Belt and Road," Energy, Elsevier, vol. 260(C).
    • Handle: RePEc:eee:energy:v:260:y:2022:i:c:s0360544222020837
    DOI: 10.1016/j.energy.2022.125193
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    References listed on IDEAS

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    Cited by:

    1. Ihor Nazarkevych & Olga Sych, 2023. "Taxation as a tool of implementation of the EU Green Deal in Ukraine," Regional Science Policy & Practice, Wiley Blackwell, vol. 15(1), pages 144-160, February.
    2. Rehman, Anis Ur & Shafiq, Aqib & Ullah, Zia & Iqbal, Sheeraz & Hasanien, Hany M., 2023. "Implications of smart grid and customer involvement in energy management and economics," Energy, Elsevier, vol. 276(C).
    3. Ruoxuan Li & Huwei Wen & Xinpeng Huang & Yaobin Liu, 2023. "Renewable Energy: A Curse or Blessing—International Evidence," Sustainability, MDPI, vol. 15(14), pages 1-18, July.
    4. Hassan, Mahmoud & Kouzez, Marc & Lee, Ji-Yong & Msolli, Badreddine & Rjiba, Hatem, 2024. "Does increasing environmental policy stringency enhance renewable energy consumption in OECD countries?," Energy Economics, Elsevier, vol. 129(C).
    5. Degirmenci, Tunahan & Yavuz, Hakan, 2024. "Environmental taxes, R&D expenditures and renewable energy consumption in EU countries: Are fiscal instruments effective in the expansion of clean energy?," Energy, Elsevier, vol. 299(C).
    6. Tii N. Nchofoung & Hervé Kaffo Fotio & Clovis Wendji Miamo, 2023. "Green taxation and renewable energy technologies adoption: A global evidence," Working Papers 23/007, European Xtramile Centre of African Studies (EXCAS).
    7. Zhu, Yi & Lin, Yangyi & Tan, Yanyu & Liu, Bin & Wang, Hao, 2024. "The potential nexus between fintech and energy consumption: A new perspective on natural resource consumption," Resources Policy, Elsevier, vol. 89(C).
    8. Han Yan & Md. Qamruzzaman & Sylvia Kor, 2023. "Nexus between Green Investment, Fiscal Policy, Environmental Tax, Energy Price, Natural Resources, and Clean Energy—A Step towards Sustainable Development by Fostering Clean Energy Inclusion," Sustainability, MDPI, vol. 15(18), pages 1-25, September.
    9. Shiyue Su & Md. Qamruzzaman & Salma Karim, 2023. "Charting a Sustainable Future: The Impact of Economic Policy, Environmental Taxation, Innovation, and Natural Resources on Clean Energy Consumption," Sustainability, MDPI, vol. 15(18), pages 1-34, September.
    10. Shah, Syed Ale Raza & Zhang, Qianxiao & Abbas, Jaffar & Tang, Hui & Al-Sulaiti, Khalid Ibrahim, 2023. "Waste management, quality of life and natural resources utilization matter for renewable electricity generation: The main and moderate role of environmental policy," Utilities Policy, Elsevier, vol. 82(C).

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