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Comparison between Romania and Sweden Based on Three Dimensions: Environmental Performance, Green Taxation and Economic Growth

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  • Roxana Maria Bădîrcea

    (Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza, 200585 Craiova, Romania)

  • Nicoleta Mihaela Florea

    (Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza, 200585 Craiova, Romania)

  • Alina Georgiana Manta

    (Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza, 200585 Craiova, Romania)

  • Silvia Puiu

    (Department of Management, Marketing and Business Administration, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza, 200585 Craiova, Romania)

  • Marius Dalian Doran

    (Doctoral School of Economic Sciences, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza, 200585 Craiova, Romania)

Abstract

One of the European Union’s (EU) objectives regarding climate change is a 40% reduction in greenhouse gas emissions by 2030, ensuring that member states focus on sustainable development. The aim of this study was the comparison of a three-dimensional relationship between green taxation, environmental performance and economic growth for the time period between 1995 and 2017 in Romania and Sweden. The novelty consists of simultaneously using the double dividend theory and environmental Kuznets curve theory for Romania. The autoregressive distributed lag (ARDL) method was used for testing the cointegration relationship. The Granger causality estimation based on the ARDL-error correction model was applied to identify the causality relationship between the variables and the pairwise Granger causality test to detect the direction of causality. The implementation of the tests led to the conclusion that environmental taxes will have a significant influence on the reduction of greenhouse gas emissions in the long run in both Romania and Sweden, while in the short run, no such influence will be noticed. Also, in Romania, in the long term, there was a bidirectional causality relationship between economic growth and greenhouse gas emissions, while in Sweden, the causality relationship was from economic growth to greenhouse gas emissions.

Suggested Citation

  • Roxana Maria Bădîrcea & Nicoleta Mihaela Florea & Alina Georgiana Manta & Silvia Puiu & Marius Dalian Doran, 2020. "Comparison between Romania and Sweden Based on Three Dimensions: Environmental Performance, Green Taxation and Economic Growth," Sustainability, MDPI, vol. 12(9), pages 1-17, May.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:9:p:3817-:d:355127
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    References listed on IDEAS

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    Cited by:

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    3. Anita Fajczak-Kowalska & Anna Misztal & Magdalena Kowalska, 2021. "Energy, Pollution, and Transport Taxes as Instruments of Sustainable Development of Manufacturing Enterprises in Emerging Economies in the European Union," European Research Studies Journal, European Research Studies Journal, vol. 0(2B), pages 724-742.
    4. Liton Chandra Voumik & Shohel Md. Nafi & Festus Victor Bekun & Murat Ismet Haseki, 2023. "Modeling Energy, Education, Trade, and Tourism-Induced Environmental Kuznets Curve (EKC) Hypothesis: Evidence from the Middle East," Sustainability, MDPI, vol. 15(6), pages 1-18, March.
    5. Norouzi, Nima & Fani, Maryam & Talebi, Saeed, 2022. "Green tax as a path to greener economy: A game theory approach on energy and final goods in Iran," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
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    7. Jean Niyigaba & Jessica Ya Sun & Daiyan Peng & Clemence Uwimbabazi, 2020. "Agriculture and Green Economy for Environmental Kuznets Curve Adoption in Developing Countries: Insights from Rwanda," Sustainability, MDPI, vol. 12(24), pages 1-21, December.
    8. Marin OPRIÈšESCU & Roxana Maria BÄ‚DÃŽRCEA & Nicoleta Mihaela FLOREA & Alina Georgiana MANTA & Silvia PUIU & Dalian Marius DORAN, 2020. "The Impact of Blue Economy and Economic Growth on Climate Changes in Baltic Countries," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(22), pages 7-20, November.
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