The Relationship between Energy Taxation and Business Environmental Protection Expenditures in the European Union

Cynthia Jeffrey and Jon D. Perkins

The International Journal of Accounting, 2014, vol. 49, issue 4, 403-425

Abstract: Businesses are often subject to energy taxes that impose a charge on greenhouse gas emissions. Theoretically, energy taxes should motivate business spending on emissions abatement up to the point that, at the margin, the cost of reducing emissions equals the amount of the tax that is avoided. We use European Union (EU) data from 2001 to 2008 to test the hypothesized positive relationship between energy taxes and business spending on abatement initiatives for the protection of ambient air and climate. We find that while overall business spending and business investment expenditures are positively related to energy tax rates, current period expenditures are not related to energy tax rates.

Keywords: Energy taxes; Carbon emissions; Business spending; Pollution mitigation (search for similar items in EconPapers)
JEL-codes: H23 H25 H32 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:accoun:v:49:y:2014:i:4:p:403-425

DOI: 10.1016/j.intacc.2014.10.002

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