Comparison between Romania and Sweden Based on Three Dimensions: Environmental Performance, Green Taxation and Economic Growth

Roxana Maria Bădîrcea, Nicoleta Mihaela Florea, Alina Georgiana Manta, Silvia Puiu and Marius Dalian Doran
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Roxana Maria Bădîrcea: Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza, 200585 Craiova, Romania
Nicoleta Mihaela Florea: Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza, 200585 Craiova, Romania
Alina Georgiana Manta: Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza, 200585 Craiova, Romania
Marius Dalian Doran: Doctoral School of Economic Sciences, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza, 200585 Craiova, Romania

Sustainability, 2020, vol. 12, issue 9, 1-17

Abstract: One of the European Union’s (EU) objectives regarding climate change is a 40% reduction in greenhouse gas emissions by 2030, ensuring that member states focus on sustainable development. The aim of this study was the comparison of a three-dimensional relationship between green taxation, environmental performance and economic growth for the time period between 1995 and 2017 in Romania and Sweden. The novelty consists of simultaneously using the double dividend theory and environmental Kuznets curve theory for Romania. The autoregressive distributed lag (ARDL) method was used for testing the cointegration relationship. The Granger causality estimation based on the ARDL-error correction model was applied to identify the causality relationship between the variables and the pairwise Granger causality test to detect the direction of causality. The implementation of the tests led to the conclusion that environmental taxes will have a significant influence on the reduction of greenhouse gas emissions in the long run in both Romania and Sweden, while in the short run, no such influence will be noticed. Also, in Romania, in the long term, there was a bidirectional causality relationship between economic growth and greenhouse gas emissions, while in Sweden, the causality relationship was from economic growth to greenhouse gas emissions.

Keywords: greenhouse gas emissions; environmental tax; double dividend theory; environmental Kuznets curve (EKC) theory (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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