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Impact of Economic Growth and Environmental Tax Revenues on Carbon Dioxide Emissions: Evidence from EU States

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  • Mehmet Hilmi Özkaya

    (Usak University)

Abstract

This study examines the impact of environmental tax revenues and economic growth on CO2 emissions in the EU member states through Westerlund and Edgerton (2007) cointegration test, panel FMOLS estimator, and Dumitrescu Hurlin (2012) causality test. The cointegration test reveals a significant long-run relationship among the variables, and the cointegration coefficients reveal that economic growth increases the CO2, emissions in the long run, but there is not a significant relationship between environmental tax revenues and CO2 emissions. On the other hand, the causality analysis reveals a bidirectional causality between environmental tax revenues and CO2 emissions and between economic growth and environmental tax revenues, and a unidirectional causality from CO2 emissions to the economic growth.

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Handle: RePEc:bau:ijaefs:v:7:y:2022:i:1:id:188
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