The link between green taxation and economic growth on CO2 emissions: Fresh evidence from Malaysia

Nanthakumar Loganathan, Muhammad Shahbaz and Roshaiza Taha

Renewable and Sustainable Energy Reviews, 2014, vol. 38, issue C, 1083-1091

Abstract: This paper explores how carbon taxation and economic growth affect environment hazards in Malaysia using time series data over the period 1974–2010. We applied cointegration and causality approaches to determine the long-term cointegration and direction of causal relationship between these variables. Based on the results, we found the cointegration relationship between the variables. Furthermore, we noted that although Kuznets׳ theory, i.e. inverted-U shaped curve between economic growth and CO2 emissions is valid for Malaysia, the carbon taxation policy is ineffective to control CO2 emissions. The causality analysis revealed that there is a bidirectional relationship between carbon tax and CO2 emissions. Economic growth Granger causes CO2 emissions and carbon tax Granger causes economic growth. To enhance the awareness concerning pollution issues, governments should rely on alternative instruments that may give benefit to the taxpayers and reduce pollution, which is the pivotal issue to be tackled globally.

Keywords: Economic growth; Carbon tax; Environment hazards (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1364032114005097
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:rensus:v:38:y:2014:i:c:p:1083-1091

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/bibliographic
http://www.elsevier. ... 600126/bibliographic

DOI: 10.1016/j.rser.2014.07.057

Access Statistics for this article

Renewable and Sustainable Energy Reviews is currently edited by L. Kazmerski

More articles in Renewable and Sustainable Energy Reviews from Elsevier
Bibliographic data for series maintained by Catherine Liu ().