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Exploring the link between energy based taxes and economic growth

Mahmoud Hassan (), Walid Oueslati () and Damien Rousselière
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Mahmoud Hassan: AGROCAMPUS OUEST, UMR SMART-LERECO
Walid Oueslati: AGROCAMPUS OUEST, UMR SMART-LERECO

Environmental Economics and Policy Studies, 2020, vol. 22, issue 1, No 5, 67-87

Abstract: Abstract This paper provides empirical evidence regarding the effect of energy based taxes on economic growth. The analysis is based on a panel dataset of 31 OECD (Organisation for Economic Co-operation and Development) member countries from 1994 to 2013, using multiple imputation algorithm to address missingness pattern. Employing the instrumental variables with two-stage least squares instrumental variable estimator, we found that energy based taxes have a negative effect on economic growth rate. This effect may rely significantly on the level of the economy’s dependence on polluting energy use as a share of total energy used in the production process. In addition, our study shows that an increase in energy based taxes can enhance significantly the economic growth rate, as the initial level of country’s richness increases.

Keywords: Environmental tax; Economic growth; Instrumental variables with two-stage least squares IV (2SLS) approach; Multiple imputation (search for similar items in EconPapers)
JEL-codes: E6 O44 Q43 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s10018-019-00247-5

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