The Contribution of Energy Taxes to Climate Change Policy in the European Union (EU)

Genovaitė Liobikienė, Mindaugas Butkus and Kristina Matuzevičiūtė
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Genovaitė Liobikienė: Department of Environmental Sciences, Vytautas Magnus University, LT-44404 Kaunas, Lithuania
Mindaugas Butkus: Institute of Regional Development, Šiauliai University, LT-77156 Šiauliai, Lithuania
Kristina Matuzevičiūtė: Institute of Regional Development, Šiauliai University, LT-77156 Šiauliai, Lithuania

Resources, 2019, vol. 8, issue 2, 1-23

Abstract: Energy taxes are one of the main market-based tools directed toward mitigating climate change in the European Union (EU). Therefore, the aim of this article was to analyze whether energy taxes really contribute to the reduction of greenhouse gas (GHG) emissions and the successful implementation of climate change policy. Applying the Granger causality test on time series and using panel data analysis, the direct and indirect (via the reduction of fossil energy consumption (FEC) and energy intensity (EI), as well as the increase of renewable energy consumption (REN)) impacts of energy taxes on GHG emissions in EU countries were analyzed in the present study. The results showed that energy taxes did not Granger-cause fossil energy consumption, energy intensity, renewable energy consumption, and GHG emissions in almost all EU countries. Regarding the panel data analysis, the results showed that energy taxes did not, directly and indirectly, influence GHG emissions. Therefore, this paper shows that generally, energy tax policy in EU countries is ineffective. Thus, tax policy should be reformed and matched with an emissions trading system in seeking climate change mitigation.

Keywords: energy taxes; climate change policy; energy efficiency; renewable energy; tax reform (search for similar items in EconPapers)
JEL-codes: Q1 Q2 Q3 Q4 Q5 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jresou:v:8:y:2019:i:2:p:63-:d:220543

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