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Emissions Reduction Policies and Their Effects on Economy

Author

Listed:
  • Apoorva Gurtu

    (Paul H. O’Neill School of Public and Environmental Affairs, Indiana University, Bloomington, IN 47405, USA)

  • Vidhisha Vyas

    (School of Management, IILM University, Gurugram, HR, Gurugram 122003, India)

  • Amulya Gurtu

    (Cofrin School of Business, University of Wisconsin-Green Bay, Green Bay, WI 54311, USA)

Abstract

The two broad carbon-reducing policies, carbon tax and cap-and-trade, have been implemented at various national and sub-national levels. This paper examines the relationships between emissions-reducing policies and their effect on the country’s economic growth (GDP) using carbon tax and CO 2 emission as explanatory variables and population and R&D as control variables. The study employs Granger causality analysis (GCA) and panel data regression analysis to find the relationships between GDP, emissions, and carbon tax. GDP usually increases as a country’s carbon emissions, carbon tax, R&D, and population increase. The analysis of carbon reduction policies, especially carbon tax and their general impact on a country’s economy, is a unique contribution of this study. The applications of this study are to motivate governments to form a national carbon abatement policy and encourage corporate leaders to invest in clean technology to grow the economy.

Suggested Citation

  • Apoorva Gurtu & Vidhisha Vyas & Amulya Gurtu, 2022. "Emissions Reduction Policies and Their Effects on Economy," JRFM, MDPI, vol. 15(9), pages 1-17, September.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:9:p:404-:d:912454
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    References listed on IDEAS

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    Cited by:

    1. Mazen A. Al-Sinan & Abdulaziz A. Bubshait & Fatimah Alamri, 2023. "Saudi Arabia’s Journey toward Net-Zero Emissions: Progress and Challenges," Energies, MDPI, vol. 16(2), pages 1-24, January.
    2. Aiwen Zhao & Xiaoqian Song & Jiajie Li & Qingchun Yuan & Yingshun Pei & Ruilin Li & Michael Hitch, 2023. "Effects of Carbon Tax on Urban Carbon Emission Reduction: Evidence in China Environmental Governance," IJERPH, MDPI, vol. 20(3), pages 1-19, January.

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