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

Author

Listed:
  • Adel Ben Youssef

    (UniCA - Université Côte d'Azur)

  • Mounir Dahmani

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur, UGAF - Université de Gafsa - Sidi Ahmed Zarroug)

  • Mohamed Mabrouki

Abstract

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.

Suggested Citation

  • Adel Ben Youssef & Mounir Dahmani & Mohamed Mabrouki, 2023. "The impact of environmentally related taxes and productive capacities on climate change: Insights from european economic area countries," Post-Print hal-04374202, HAL.
    • Handle: RePEc:hal:journl:hal-04374202
    DOI: 10.1007/s11356-023-29442-4
    Note: View the original document on HAL open archive server: https://hal.science/hal-04374202
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