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Examining the Impact of Environmental Taxation, Economic Growth, and Political Instability on Sustainability

Author

Listed:
  • Gillani, Syed Irfan Haider
  • Ali, Amjad
  • Audi, Marc

Abstract

Sustainable development is the most challenging issue facing the whole world. It includes multiple dimensions like economic, social, and environmental. The current study explores the determinants of sustainability in developing countries by incorporating the role of environmental taxes, economic growth, renewable energy, and political stability. The study used 21 developing countries from 1994 to 2023 to find the impact of these macroeconomic variables on greenhouse gas emissions. The generalized method of moments and penal least squares with fixed effects model have been used to find robust empirical evidence. The empirical findings indicate that environmental taxes have a significant positive impact on environmental sustainability, while renewable energy, political stability, and economic growth have a significant negative impact on environmental sustainability. The study also demonstrates the moderating role of environmental taxes on renewable energy and political stability. It indicates that environmental taxes have no statistical support to build a statement about the moderating role. The study suggests that policy makers to take immediate action to revise taxation policies by incorporating the current challenges faced by the environment. Renewable energy sources should be promoted to make them accessible. If possible, taxes on accessories of renewable energy setups should immediately be removed.

Suggested Citation

  • Gillani, Syed Irfan Haider & Ali, Amjad & Audi, Marc, 2026. "Examining the Impact of Environmental Taxation, Economic Growth, and Political Instability on Sustainability," MPRA Paper 128671, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:128671
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    References listed on IDEAS

    as
    1. Audi, Marc & Ali, Amjad, 2016. "Environmental Degradation, Energy consumption, Population Density and Economic Development in Lebanon: A time series Analysis (1971-2014)," MPRA Paper 82494, University Library of Munich, Germany, revised 2017.
    2. Jianguo Du & Yasir Rasool & Umair Kashif, 2025. "Asymmetric Impacts of Environmental Policy, Financial, and Trade Globalization on Ecological Footprints: Insights from G9 Industrial Nations," Sustainability, MDPI, vol. 17(4), pages 1-21, February.
    3. Khalid S. Al-Abdulqader & Abdul-Jalil Ibrahim & JingKai Ong & Ahmed A. Khalifa, 2025. "Does Carbon Pricing Matter? Evidence from a Global Sample," Energies, MDPI, vol. 18(5), pages 1-19, February.
    4. Audi, Marc & Ahmad, Muhammad Bilal & Ahmad, Khalil & Poulin, Marc & Ali, Amjad, 2025. "Different Dimensions of Globalization and CO2 Emission Nexus: Application of Environmental Kuznets Curve for Worldwide Perspective," MPRA Paper 124294, University Library of Munich, Germany.
    5. Weicheng Xu & Yunpeng Zhang, 2025. "The Impact of Carbon Taxes and Carbon Tax Recovery on the Chinese Economy: A Green Technological Progress Perspective," Sustainability, MDPI, vol. 17(4), pages 1-25, February.
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    7. Ying Wang & Igor A. Mayburov, 2025. "Scenario-Based Forecasting of the Impact of Tax Incentives on Green R&D in China’s Wind Power Industry in a Complex Network Environment," Sustainability, MDPI, vol. 17(4), pages 1-33, February.
    8. Amjad Ali & Marc Audi, 2016. "The Impact of Income Inequality, Environmental Degradation and Globalization on Life Expectancy in Pakistan: An Empirical Analysis," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 4(4), pages 182-193, April.
    9. Fiaz Ahmad Sulehri & Marc Audi & Marc Poulin & Amjad Ali, 2024. "Nexus between Innovation and Ecological Impact: A Moderated Mediation Investigation through Structural Equation Modeling Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 509-518, July.
    10. İbrahim Özmen & Mihai Mutascu, 2025. "Don’t look earth: environmental taxes effect on Co2 emissions, evidence from moments quantile regression for EU countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(2), pages 4619-4658, February.
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    12. Sadiq, Kinza & Ali, Amjad & Usman, Muhammad & Sulehri, Fiaz Ahmad, 2025. "Nexus among Ecological Footprint, Green Finance and Renewable Energy Consumption: A Global Perspective," MPRA Paper 124498, University Library of Munich, Germany.
    13. Muhammad Farhan Bashir & Fouad Jamaani & Ciro Troise & Stefano Bresciani, 2025. "Assessing the Impact of Environmental Taxes, Energy Structure and Renewable Energy Investments on Climate Change: Empirical Evidence From Top‐10 Polluting Economies," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(6), pages 8174-8189, December.
    14. Saima Ashiq & Amjad Ali & Hafiz Muhammad Abubakar Siddique & Sumaira, 2023. "Impact Of Innovation On Co2 Emissions In South Asian Countries," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(2), pages 201-211.
    15. Amjad Ali & Marc Audi & Yannick Roussel, 2021. "Natural Resources Depletion, Renewable Energy Consumption and Environmental Degradation: A Comparative Analysis of Developed and Developing World," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 251-260.
    16. Salim Ali Salim Omar & Wagdi M. S. Khalifa & Ponle H. Kareem, 2025. "The Influence of Trade, Technology and Economic Growth on Environmental Sustainability in the Gulf Cooperation Countries—New Evidence with the MMQR Method," Sustainability, MDPI, vol. 17(2), pages 1-15, January.
    17. Sugra Ingilab Humbatova & Nargiz Hajiyeva & Monika Garai Fodor & Kiran Sood & Simon Grima, 2024. "The Impact of Economic Growth on the Ecological Environment and Renewable Energy Production: Evidence from Azerbaijan and Hungary," JRFM, MDPI, vol. 17(7), pages 1-26, June.
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    19. Ali, Amjad & Sumaira, Sumaira & Siddique, Hafiz Muhammad Abubakar & Ashiq, Saima, 2023. "Impact of Economic Growth, Energy Consumption and Urbanization on Carbon Dioxide Emissions in the Kingdom of Saudi Arabia," MPRA Paper 118832, University Library of Munich, Germany.
    20. Md. Hasanur Rahman & Liton Chandra Voumik & Salma Akter & Magdalena Radulescu, 2025. "New insights from selected South Asian countries on the determinants of GHG emissions," Energy & Environment, , vol. 36(2), pages 958-978, March.
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    Keywords

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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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