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Double Taxation Treaties with the United States and Environmental Quality in Emerging Economies

Author

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  • Alberto Chong

    (Georgia State University and Universidad del Pacifico)

  • Erica Louis Mtenga

    (Department of Economics, University of Dar es Salaam and Environment for Development (EfD))

Abstract

We focus on the role of double taxation treaties on environmental quality, to our knowledge the first empirical study to do so. Tax treaties are primarily implemented to remove double taxation, which helps promote international trade and investment. However, they are also aimed to address tax evasion and avoidance, which tends to have the opposite effect. As a result, the environmental impact is unclear. Specifically, we exploit the variation in the effective dates of the United States tax treaties with emerging countries between 1990 to 2014 by applying difference-in-differences methods. We find that tax treaties significantly help reduce carbon dioxide emissions in emerging markets. This appears to be driven by the reduction in investments in pollution-intensive industries after tax treaty enactments.

Suggested Citation

  • Alberto Chong & Erica Louis Mtenga, 2026. "Double Taxation Treaties with the United States and Environmental Quality in Emerging Economies," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper2621, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper2621
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