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Transport Infrastructure Investment, Transport Tax, Institutional Quality, and Transport‐Based CO2 Emissions: Is an Environmentally Sustainable Transport Policy Followed in the Selected EU Countries?

Author

Listed:
  • Aviral Kumar Tiwari
  • Mucahit Aydin
  • Tunahan Degirmenci
  • Emrah Sofuoğlu
  • Abdullah Ozcelik

Abstract

This study examines the relationship between transport infrastructure investment, transport tax, institutional quality, and transport‐based CO2 emissions in nine selected European countries (Austria, Belgium, Finland, France, Germany, Hungary, Slovakia, Spain, and Sweden). In this regard, the study employs the cointegration tests and Common Correlated Effects Mean Group (CCEMG) and Augmented Mean Group (AMG) long‐run estimators from 1995 to 2020. The cointegration test captures a long‐term relationship between transport infrastructure investment, transport tax, institutional quality, and transport‐based CO2 emissions. Furthermore, AMG long‐run test results reveal several empirical findings: (i) While transport infrastructure investment increases transport‐based CO2 emissions in Germany and Hungary, it has a reducing effect in Austria. (ii) Transport tax increases transport‐based CO2 emissions in Spain. However, it has a reducing effect in Slovakia and Sweden. (iii) Institutional quality increases transport‐based CO2 emissions in Austria, while it has a reducing effect in Slovakia. For a robustness check, the CCEMG long‐run estimator validates the AMG results. In the context of the findings, we recommend that policymakers implement long‐term transportation strategies through transport taxes and institutional quality.

Suggested Citation

  • Aviral Kumar Tiwari & Mucahit Aydin & Tunahan Degirmenci & Emrah Sofuoğlu & Abdullah Ozcelik, 2025. "Transport Infrastructure Investment, Transport Tax, Institutional Quality, and Transport‐Based CO2 Emissions: Is an Environmentally Sustainable Transport Policy Followed in the Selected EU Countries?," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(6), pages 8098-8109, December.
    • Handle: RePEc:wly:sustdv:v:33:y:2025:i:6:p:8098-8109
    DOI: 10.1002/sd.70083
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