Empirical Evidence on the Effectiveness of Environmental Taxes
AbstractThe aim of this study is to determine whether environmental taxes affect levels of pollution and energy consumption. Using a panel of EU members and Norway, we find a significant negative relationship between taxes and pollution, but no relationship with energy consumption. A further contribution to the literature involves the use of the Arellano-Bover approach to dynamic panels, to account for the potential partial adjustment towards desired or target levels of pollution and energy usage. The results provide evidence of partial adjustment, as well as evidence of the negative relationship between environmental taxes and pollution.
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Bibliographic InfoPaper provided by University of Bath, Department of Economics in its series Department of Economics Working Papers with number 18105.
Date of creation: Feb 2010
Date of revision:
partial adjustment; dynamic panel; pollution; environmental tax; energy;
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