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The role of environmental taxes on carbon emissions in countries aiming for net-zero carbon emissions: Does renewable energy consumption matter?

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  • Zhu, Yongfeng
  • Taylor, David
  • Wang, Zilong

Abstract

Implementing or increasing environmental taxes and the improved availability of renewable energy are commonly assumed to be effective enabling interventions in transitioning to a low carbon economy and achieving net-zero emissions. The assumption ignores the possibility for interactions between environmental taxes, the ease of accessing renewable energy sources, and CE. The current study examined interactive effects of environmental taxes, renewable energy and CE in 51 economically developed and developing countries over the period 2006 to 2020 using spatial econometric and panel threshold models. Results suggest that environmental taxes and renewable energy consumption could mitigate CE in one country, while contributing to a transfer, or leakage, of CE to neighbouring jurisdictions. Moreover, a synergistic effect is evident in which the effectiveness of environmental taxes to reduce CE increases as the share of renewable energy in the total energy mix for a country also rises. These findings highlight the benefits of taking into account spatial interactions between environmental regulations, renewable energy availability and CE and of adopting a more regional approach to agreeing and attaining carbon neutrality targets.

Suggested Citation

  • Zhu, Yongfeng & Taylor, David & Wang, Zilong, 2023. "The role of environmental taxes on carbon emissions in countries aiming for net-zero carbon emissions: Does renewable energy consumption matter?," Renewable Energy, Elsevier, vol. 218(C).
    • Handle: RePEc:eee:renene:v:218:y:2023:i:c:s0960148123011540
    DOI: 10.1016/j.renene.2023.119239
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    2. Obobisa, Emma Serwaa & Ahakwa, Isaac, 2024. "Stimulating the adoption of green technology innovation, clean energy resources, green finance, and environmental taxes: The way to achieve net zero CO2 emissions in Europe?," Technological Forecasting and Social Change, Elsevier, vol. 205(C).
    3. Olani Bekele Sakilu & Haibo Chen, 2024. "Realizing Carbon Neutrality in Top-Emitter Countries: Do Green Technology Innovation, Renewable Energy, Financial Development, and Environmental Tax Matters?," Sustainability, MDPI, vol. 17(1), pages 1-26, December.
    4. Feng Wu & Buhari Dogan & Sunil Tiwari & Sudeshna Ghosh & Muhammad Farhan Bashir & Daniel Balsalobre‐Lorente, 2026. "From Policy to Practice: How Eco‐Innovation, Green Finance, and Environmental Taxes Drive Carbon Neutrality and Sustainable Development," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(2), pages 2146-2165, April.
    5. Li, Qingyang & Li, Zhongwei & Jin, Xianji & Chen, Yongxu & Lei, Qian & Wu, Qianying & Guan, Huaiming, 2025. "Multi-agent deep reinforcement learning based low-carbon Economy energy planning strategy in IES connected with microgrid," Energy, Elsevier, vol. 337(C).
    6. Yang, Shaowen & Dang, Yaoguo & Wang, Junjie & Yang, Yingjie & Geng, Shuaishuai, 2025. "Assessing the dynamic impact of renewable energy technology on carbon intensity: A novel grey dynamic time incidence model for China," Energy, Elsevier, vol. 338(C).
    7. Magdalena Radulescu & Daniel Balsalobre-Lorente & Syed Ale Raza Shah & Niu Rong & Naila Abbas, 2025. "Green path towards environmental sustainability: integrating role of energy equity, environmental justice, and energy transition in selected high-income economies," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-23, December.
    8. Ke, Yiming & Liu, Wei & Wang, Jingxuan & Yunna, Wu & Yao, Qi & Liu, Fangtong, 2025. "How to improve eco-efficiency of projects with low-carbon transition in energy utilization," Energy, Elsevier, vol. 322(C).

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