Meta-Analysis of Environmental Effectiveness, and Carbon Taxation Strategic Adaptation: Implications for Developing Economies

The purpose of this study was to systematically review and conduct a meta-analysis on the effect of environmental effectiveness on carbon taxation strategic adaptation. The competitiveness and innovation, particularly employment, total productivity, and foreign direct investment capability of a nation, could predict the adoption of carbon taxation strategies, especially in developing economies where the need for economic growth and development may override the need to address the existential threat of climate change. Carbon taxation, environmental tax, green tax, and carbon emissions trading have been shown to catalyze the reduction of carbon dioxide emissions, which is a key ingredient of climate change. Using data drawn from Scopus and Web of Science databases, a total of 55 articles were reviewed and included in meta-analysis following the guidance of the PRISMA flowchart. The results from meta-analysis pointed that random-effects pooled effect μ = −0.038 (SE = 0.010; 95% CI −0.057, −0.019; k = 55); Q (54) = 1902.03, p < 0.001; I² = 97.2%; τ² = 0.004059; H² = 35.22; 95% PI −0.165 to 0.088; region differences significant (Q-between (10) = 45.05, p = 2.1×10⠻⠶). Drawing from these statistical conventions, emissions fall on average, but very large heterogeneity and a wide PI indicate realized abatement depends on coverage, exemptions, price credibility, and complements, including grids, standards, and diffusion support. It is concluded that effectiveness is real but conditional, meaning a stronger carbon tax design yields larger and more durable reductions of carbon emissions.