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Does green tax theory affect the environmental sustainability and protection?

Author

Listed:
  • Muhammad Naveed Ahmad

    (University of Science and Technology Beijing, Haidian District)

  • Xiaoguang Zhou

    (University of Science and Technology Beijing, Haidian District)

  • Sagheer Muhammad

    (University of Science and Technology Beijing, Haidian District
    University of Gujrat)

  • Malik Shahzad Shabbir

    (University of Science and Technology Beijing, Haidian District
    ILMA University of Karachi)

Abstract

In emerging nations, green tax benefits pertaining to environmental sustainability, such as taxable tax income adjustments and the ITC (investment tax credit), are gaining popularity. On the other hand, implementing green tax incentives that address climate change in achieving the growth goals for sustainability measures. This research uses environment, social and governance (ESG) scores to construct our dependent variable. To determine which firms and how long the sample observations alter, this study employs a longitudinal research methodology. Probit and logistic regression are then used to determine who will benefit from the tax incentives. It has been noted that a company's more sustainable production methods are reflected in its higher ESG score. For this reason, our analysis employs dummy 1 for companies at the top of the ESG ranking and 0 otherwise.

Suggested Citation

  • Muhammad Naveed Ahmad & Xiaoguang Zhou & Sagheer Muhammad & Malik Shahzad Shabbir, 2025. "Does green tax theory affect the environmental sustainability and protection?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(7), pages 17383-17393, July.
    • Handle: RePEc:spr:endesu:v:27:y:2025:i:7:d:10.1007_s10668-024-04601-w
    DOI: 10.1007/s10668-024-04601-w
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    Keywords

    Businesses; Green tax incentives; Sustainable production; Green environment; ESG; Environmental protection;
    All these keywords.

    JEL classification:

    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition

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