Environmental taxes, reforms and economic growth: an empirical analysis of panel data

Mahmoud Hassan, Walid Oueslati and Damien Rousselière

Economic Systems, 2020, vol. 44, issue 3

Abstract: This paper explores the relationship between environmentally related taxes and the economic growth rate. The analysis also investigates whether this relationship differs between countries that have implemented environmental tax reforms (ETRs) and those that have not. Using panel data from 31 OECD countries over the period 1994–2013, the paper finds that when we allow environmentally related tax revenues to interact with an initial level of real GDP per capita, the overall revenues of these taxes are negatively associated with the economic growth rate in the short and long term. Furthermore, we show that the higher the initial level of GDP per capita, the more environmentally related tax revenues can promote the economic growth rate. The analysis also reveals that the relationship between environmentally related tax revenues and economic growth varies between countries that have a mechanism to redistribute environmentally related tax revenues and those that do not.

Keywords: Environmentally related taxes; Environmental tax reforms; Economic growth; Multiple imputations (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (21)

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Working Paper: Environmental taxes, reforms and economic growth: An empirical analysis of panel data (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:44:y:2020:i:3:s093936251830400x

DOI: 10.1016/j.ecosys.2020.100806

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