Does fiscal policy spur environmental issues? New evidence from selected developed countries

Özmen I., Özcan G., Özcan C., Bekun F. V.

International Journal of Environmental Science and Technology, cilt.19, sa.11, ss.10831-10844, 2022 (SCI-Expanded) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 19 Sayı: 11
  • Basım Tarihi: 2022
  • Doi Numarası: 10.1007/s13762-022-03907-4
  • Dergi Adı: International Journal of Environmental Science and Technology
  • Derginin Tarandığı İndeksler: Science Citation Index Expanded (SCI-EXPANDED), Scopus, Aqualine, Aquatic Science & Fisheries Abstracts (ASFA), Biotechnology Research Abstracts, CAB Abstracts, Compendex, Environment Index, Geobase, INSPEC, Pollution Abstracts, Veterinary Science Database
  • Sayfa Sayıları: ss.10831-10844
  • Anahtar Kelimeler: Cross-section dependence, Environmental tax, Fiscal policy, Heterogeneous panel
  • İstanbul Gelişim Üniversitesi Adresli: Evet

Özet

In this study, we investigate the effects of fiscal policies on the environment with annual frequency period from 1972 to 2017 data for countries such as Australia, Chile, Finland, the UK, and Sweden. This study leverages on second-generation unit root tests, bootstrap cointegrated test, and long-run coefficient estimators suitable for heterogeneous panels under review. Empirical results of the long-run coefficient estimators are consistent with economic-environmental intuition and extant literature. However, in terms of fiscal policy, these results do not provide any evidence of the expected mitigating effects on environmental pollution in any country. Our main findings show that revenue policy does not go beyond funding government expenditure in these countries. Based on these results, we propose two new concepts to the literature on carbon taxes. We call these concepts New Environmental Sin Taxes and Global Environmental Debts. We base this result on the argument that regional solutions to global problems are insufficient.