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AB Ülkelerinde Çevre Vergileri ve Karbondioksit Emisyonu: Panel VAR Yaklaşımı

Year 2019, Volume: 1 Issue: 1, 20 - 33, 30.12.2019

Onur Polat

Abstract

In this study, we analyze propagation mechanisms between environmental taxes and carbon dioxide emission in EU states by employing the panel VAR (PVAR) model. In this respect, we use annual data that consists of GDP (current US$ per capita), CO2 emission (metric ton per capita), energy use (kg of oil equivalent per capita) and environmental tax revenues (proportion of GDP) from 1995 through 2014 for 24 EU countries in the PVAR model and identify short/long run transmission mechanisms between the variables. Cross-sectional dependence is tested by the Peseran’s CD test and the second-generation panel unit root test is carried out to determine stationarity of the variables. The empirical findings of the study underline the significance of environmental taxes in mitigating CO2 emission and accordingly propose the environmental taxes in internalizing negative externalities along with other policy tools. Even though, various policies should be applied simultaneously and globally to mitigate the deleterious effects of green gas emissions for humanity and the environment along with environmental taxes.

Keywords

Çevre Vergileri CO2 emisyonu Panel VAR

References

  • Abdullah, S., & Morley, B. (2014). Environmental taxes and economic growth: Evidence from panel causality tests. Energy Economics, 42, 27-33.
  • Allan, G., Lecca, P., McGregor, P., & Swales, K. (2014). The economic and environmental impact of a carbon tax for Scotland: a computable general equilibrium analysis. Ecological Economics, 100, 40-50.
  • André, F. J., Cardenete, M. A., & Velázquez, E. (2005). Performing an environmental tax reform in a regional economy. A computable general equilibrium approach. The Annals of Regional Science, 39(2), 375-392.
  • Andrews, D. (2005). Cross section regression with common shocks. Econometrica 73, 1551-1585.
  • Andrews, D. W., & Lu, B. (2001). Consistent model and moment selection procedures for GMM estimation with application to dynamic panel data models. Journal of Econometrics, 101(1), 123-164.
  • Boehringer, C., Garcia-Muros, X., & González-Eguino, M. (2019). Greener and fairer: A progressive environmental tax reform for Spain (Vol. 418, No. 19). Oldenburg Discussion Papers in Economics.
  • Bosquet, B. (2000). Environmental tax reform: does it work? A survey of the empirical evidence. Ecological economics, 34(1), 19-32.
  • Bruvoll, A., & Larsen, B. M. (2004). Greenhouse gas emissions in Norway: do carbon taxes work? Energy policy, 32(4), 493-505.
  • Canova, F., & Ciccarelli, M. (2013). Panel Vector Autoregressive Models: A Survey. In VAR Models in Macroeconomics–New Developments and Applications: Essays in Honor of Christopher A. Sims (pp. 205-246). Emerald Group Publishing Limited.
  • Chudik, A., & Pesaran, M. H. (2013). Large panel data models with cross-sectional dependence: a survey. CAFE Research Paper, (13.15).
  • Ekins, P., Summerton, P., Thoung, C., & Lee, D. (2011). A major environmental tax reform for the UK: Results for the economy, employment and the environment. Environmental and Resource Economics, 50(3), 447-474.
  • Elliott, J., & Fullerton, D. (2014). Can a unilateral carbon tax reduce emissions elsewhere? Resource and Energy Economics, 36(1), 6-21.
  • Eurostat. (2017a, 12 5). Retrieved from Environmental Tax Revenues: http://ec.europa.eu/eurostat/web/products-datasets/-/t2020_rt320
  • Eurostat. (2017b, 12 9). Retrieved from Environmental Taxes: http://ec.europa.eu/eurostat/web/environment/environmental-taxes
  • Fisher, E. O. N., & Marrewijk, C. V. (1998). Pollution and economic growth. Journal of International Trade & Economic Development, 7(1), 55-69.
  • Gemechu, E. D., Butnar, I., Llop, M., & Castells, F. (2014). Economic and environmental effects of CO2 taxation: an input-output analysis for Spain. Journal of Environmental Planning and Management, 57(5), 751-768.
  • Hansen, L. P. (1982). Large sample properties of generalized method of moments estimators. Econometrica: Journal of the Econometric Society, 1029-1054.
  • Holtz-Eakin, D., Newey, W., & Rosen, H. S. (1988). Estimating vector autoregressions with panel data. Econometrica: Journal of the Econometric Society, 1371-1395.
  • Hong, C. Y., Huang, C. H., Li, J. F., & Tsai, Y. C. (2018). Environmental Tax Reform, R&D Subsidies and CO2 Emissions: View Double Dividend Hypothesis. International Journal of Energy Economics and Policy, 8(5), 288-293.
  • Jeffrey, C., & Perkins, J. D. (2015). The association between energy taxation, participation in an emissions trading system, and the intensity of carbon dioxide emissions in the European Union. The International Journal of Accounting, 50(4), 397-41.
  • Liang, Q. M., Fan, Y., & Wei, Y. M. (2007). Carbon taxation policy in China: How to protect energy-and trade-intensive sectors? Journal of Policy Modeling, 29(2), 311-333.
  • Li, G., & Masui, T. (2019). Assessing the impacts of China's environmental tax using a dynamic computable general equilibrium model. Journal of Cleaner Production, 208, 316-324.
  • Lin, B., & Li, X. (2011). The effect of carbon tax on per capita CO2 emissions. Energy policy, 39(9), 5137-5146.
  • Lin, B., & Jia, Z. (2019). How does tax system on energy industries affect energy demand, CO2 emissions, and economy in China?. Energy Economics, 104496.
  • Miller, S., & Vela, M. (2013). Are environmentally related taxes effective?.
  • OECD. (2017). Environmental Taxation A Guide for Policy Makers. OECD. Paris: OECD. Retrieved 12 10, 2017, from https://www.oecd.org/env/tools-evaluation/48164926.pdf.
  • Pesaran, M. (2004). General Diagnostic Tests for Corss Section Dependence in Panels. IZA Discussion Paper, 1240.
  • Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of applied econometrics, 22(2), 265-312.
  • Sarafidis, V., & T. Wansbeek (2012). Cross-sectional dependence in panel data analysis. Econometric Reviews 31, 483.531.
  • Silajdzic, S., & Mehić, E. (2018). Do Environmental Taxes Pay Off? The Impact of Energy and Transport Taxes on CO2 Emissions in Transition Economies. The South East European Journal of Economics and Business, 13(2), 126-143

Environmental Taxes and Carbon dioxide Emission in EU Countries: A Panel VAR Approach

Year 2019, Volume: 1 Issue: 1, 20 - 33, 30.12.2019

Onur Polat

Abstract

In this study, we analyze propagation mechanisms between environmental taxes and carbon dioxide emission in EU states by employing the panel VAR (PVAR) model. In this respect, we use annual data that consists of GDP (current US$ per capita), CO2 emission (metric ton per capita), energy use (kg of oil equivalent per capita) and environmental tax revenues (proportion of GDP) from 1995 through 2014 for 24 EU countries in the PVAR model and identify short/long run transmission mechanisms between the variables. Cross-sectional dependence is tested by the Peseran’s CD test and the second-generation panel unit root test is carried out to determine stationarity of the variables. The empirical findings of the study underline the significance of environmental taxes in mitigating CO2 emission and accordingly propose the environmental taxes in internalizing negative externalities along with other policy tools. Even though, various policies should be applied simultaneously and globally to mitigate the deleterious effects of green gas emissions for humanity and the environment along with environmental taxes.

Keywords

Environmental taxes ; CO2 emission Panel VAR

References

  • Abdullah, S., & Morley, B. (2014). Environmental taxes and economic growth: Evidence from panel causality tests. Energy Economics, 42, 27-33.
  • Allan, G., Lecca, P., McGregor, P., & Swales, K. (2014). The economic and environmental impact of a carbon tax for Scotland: a computable general equilibrium analysis. Ecological Economics, 100, 40-50.
  • André, F. J., Cardenete, M. A., & Velázquez, E. (2005). Performing an environmental tax reform in a regional economy. A computable general equilibrium approach. The Annals of Regional Science, 39(2), 375-392.
  • Andrews, D. (2005). Cross section regression with common shocks. Econometrica 73, 1551-1585.
  • Andrews, D. W., & Lu, B. (2001). Consistent model and moment selection procedures for GMM estimation with application to dynamic panel data models. Journal of Econometrics, 101(1), 123-164.
  • Boehringer, C., Garcia-Muros, X., & González-Eguino, M. (2019). Greener and fairer: A progressive environmental tax reform for Spain (Vol. 418, No. 19). Oldenburg Discussion Papers in Economics.
  • Bosquet, B. (2000). Environmental tax reform: does it work? A survey of the empirical evidence. Ecological economics, 34(1), 19-32.
  • Bruvoll, A., & Larsen, B. M. (2004). Greenhouse gas emissions in Norway: do carbon taxes work? Energy policy, 32(4), 493-505.
  • Canova, F., & Ciccarelli, M. (2013). Panel Vector Autoregressive Models: A Survey. In VAR Models in Macroeconomics–New Developments and Applications: Essays in Honor of Christopher A. Sims (pp. 205-246). Emerald Group Publishing Limited.
  • Chudik, A., & Pesaran, M. H. (2013). Large panel data models with cross-sectional dependence: a survey. CAFE Research Paper, (13.15).
  • Ekins, P., Summerton, P., Thoung, C., & Lee, D. (2011). A major environmental tax reform for the UK: Results for the economy, employment and the environment. Environmental and Resource Economics, 50(3), 447-474.
  • Elliott, J., & Fullerton, D. (2014). Can a unilateral carbon tax reduce emissions elsewhere? Resource and Energy Economics, 36(1), 6-21.
  • Eurostat. (2017a, 12 5). Retrieved from Environmental Tax Revenues: http://ec.europa.eu/eurostat/web/products-datasets/-/t2020_rt320
  • Eurostat. (2017b, 12 9). Retrieved from Environmental Taxes: http://ec.europa.eu/eurostat/web/environment/environmental-taxes
  • Fisher, E. O. N., & Marrewijk, C. V. (1998). Pollution and economic growth. Journal of International Trade & Economic Development, 7(1), 55-69.
  • Gemechu, E. D., Butnar, I., Llop, M., & Castells, F. (2014). Economic and environmental effects of CO2 taxation: an input-output analysis for Spain. Journal of Environmental Planning and Management, 57(5), 751-768.
  • Hansen, L. P. (1982). Large sample properties of generalized method of moments estimators. Econometrica: Journal of the Econometric Society, 1029-1054.
  • Holtz-Eakin, D., Newey, W., & Rosen, H. S. (1988). Estimating vector autoregressions with panel data. Econometrica: Journal of the Econometric Society, 1371-1395.
  • Hong, C. Y., Huang, C. H., Li, J. F., & Tsai, Y. C. (2018). Environmental Tax Reform, R&D Subsidies and CO2 Emissions: View Double Dividend Hypothesis. International Journal of Energy Economics and Policy, 8(5), 288-293.
  • Jeffrey, C., & Perkins, J. D. (2015). The association between energy taxation, participation in an emissions trading system, and the intensity of carbon dioxide emissions in the European Union. The International Journal of Accounting, 50(4), 397-41.
  • Liang, Q. M., Fan, Y., & Wei, Y. M. (2007). Carbon taxation policy in China: How to protect energy-and trade-intensive sectors? Journal of Policy Modeling, 29(2), 311-333.
  • Li, G., & Masui, T. (2019). Assessing the impacts of China's environmental tax using a dynamic computable general equilibrium model. Journal of Cleaner Production, 208, 316-324.
  • Lin, B., & Li, X. (2011). The effect of carbon tax on per capita CO2 emissions. Energy policy, 39(9), 5137-5146.
  • Lin, B., & Jia, Z. (2019). How does tax system on energy industries affect energy demand, CO2 emissions, and economy in China?. Energy Economics, 104496.
  • Miller, S., & Vela, M. (2013). Are environmentally related taxes effective?.
  • OECD. (2017). Environmental Taxation A Guide for Policy Makers. OECD. Paris: OECD. Retrieved 12 10, 2017, from https://www.oecd.org/env/tools-evaluation/48164926.pdf.
  • Pesaran, M. (2004). General Diagnostic Tests for Corss Section Dependence in Panels. IZA Discussion Paper, 1240.
  • Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of applied econometrics, 22(2), 265-312.
  • Sarafidis, V., & T. Wansbeek (2012). Cross-sectional dependence in panel data analysis. Econometric Reviews 31, 483.531.
  • Silajdzic, S., & Mehić, E. (2018). Do Environmental Taxes Pay Off? The Impact of Energy and Transport Taxes on CO2 Emissions in Transition Economies. The South East European Journal of Economics and Business, 13(2), 126-143
There are 30 citations in total.

Details

Primary Language English
Subjects Economics
Journal Section Research Articles
Authors

Onur Polat 0000-0002-7170-4254

Publication Date December 30, 2019
Published in Issue Year 2019 Volume: 1 Issue: 1

Cite

APA Polat, O. (2019). Environmental Taxes and Carbon dioxide Emission in EU Countries: A Panel VAR Approach. Economics Business and Organization Research, 1(1), 20-33.

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