مرکز منطقه ای اطلاع رساني علوم و فناوري - Environmental Tax and Economic Growth Dilemma

Abstract :

Increased economic activities may have both negative and positive effects on environment. For instance, increased in production and economic growth may cause high living standards. On the other hand, it may also cause environmental pollution due to excessive and inefficient use of resources. Environmental taxes are applied in order to eliminate externalities resulting from environmental pollution. However the effects of environmental taxes applied may differ. They lead to efficient use of resources by promoting environmental friendly technologies and create a positive impact on economic growth in some economies, while they slow down growth rate in other economies. In this study, the relationship between CO2 emission, national income per capita and environmental taxes has been analyzed. The data have been collected from the World Bank and the OECD. By using mentioned variables, Cointegration Test has been used in order to analyze long term relationship between the series. Then, Vector Autoregressive Model (VAR) has been applied in the second stage of the analysis. The findings indicate that there is a long-run relationship between variables.