Symphony or Solo: Does Convergence Exist in Environmental Taxation among EU Countries?

Zhengzheng Li (), Zhongyang Sun, Kaihua Wang () and Oana-Ramona Lobonț
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Zhengzheng Li: School of Economics, Qingdao University, Qingdao 266071, China
Zhongyang Sun: School of Economics, Qingdao University, Qingdao 266071, China
Kaihua Wang: School of Economics, Qingdao University, Qingdao 266071, China
Oana-Ramona Lobonț: Department of Finance, Business Information Systems and Modelling, Faculty of Economics and Business Administration, West University of Timisoara, 300223 Timisoara, Romania

Sustainability, 2024, vol. 16, issue 17, 1-21

Abstract: This study sought to ascertain the existence of convergence in environmental taxation among EU countries. By employing the sequential panel selection method and the panel KSS unit root test, it is demonstrated that the environmental taxation sequences in Luxembourg, Germany, Spain, France, and Cyprus diverge, while those of the remaining 22 countries converge. Similarly, the energy tax sequences of Croatia, Spain, Germany, and France are unstable, indicating divergence, while the remaining 23 countries exhibit significant convergence. Finally, transport taxes show a convergent trend across all EU countries. The convergence of environmental taxation can be explained by the catch-up and spatial spillover effects, and the non-convergence of a few EU countries is attributed to their minimal implementation of environmental goals. This study provides recommendations for improving environmental policies.

Keywords: convergence; environmental taxation; panel unit root test; sequential panel selection method (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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