Does environmental taxes achieve the carbon neutrality target of G7 economies? Evaluating the importance of environmental R&D.

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Date: Sept. 1, 2021
Publisher: Elsevier B.V.
Document Type: Report; Brief article
Length: 336 words

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Abstract :

Keywords Environmental taxes; Environmental R&D; Trade; G-7 countries; Carbon neutrality Highlights * We examined the effect of environmental taxes and R&D on carbon emission. * This study makes use of advanced panel data econometric techniques. * Environmental taxes, R&D, and exports significantly reduce carbon emissions. * Economic growth and imports have a positive impact on carbon emissions. * G-7 countries should focus on R&D and taxes to achieve carbon neutrality. Abstract The present study highlights the importance of environmental taxes and R&D in achieving the goal of carbon neutrality. Post Paris conference (COP21), countries set domestic targets to achieve zero carbon or carbon neutrality. Several studies have been conducted to explore the factors affecting environmental quality. However, the literature on the importance of environmental taxes and environmental R&D in affecting environmental quality is scant, and thus, this study investigates the impact of environmental taxes and R&D on consumption-based carbon emissions for G-7 countries over a period of 1990--2019. The cointegration test results show a stable long-run association between environmental taxes, environmental R&D, imports, exports, GDP, and consumption-based CO.sub.2 emissions. The results show that in the short- and long-run, environmental taxes, environmental R&D, and exports significantly reduce carbon emissions, whereas GDP and imports significantly enhance carbon emissions. The Dumitrescu and Hurlin Granger causality test results show that any policy that targets environmental taxes, environmental R&D, exports, imports, and GDP significantly changes CO.sub.2 emissions. This study recommends that policymakers in G-7 countries should focus on environmental R&D and taxes to achieve the goal of carbon neutrality. Author Affiliation: (a) School of Economics, Qingdao University, Shandong Province, China (b) Institute of Wealth Management, School of Economics, Qingdao University, Shandong Province, China (c) Department of Accounting and Finance, Faculty of Economics and Administrative Sciences, Cyprus International University, Mersin 10, 99040, Haspolat, Turkey * Corresponding author. Article History: Received 18 March 2021; Revised 27 April 2021; Accepted 26 May 2021 Byline: Adnan Safi [adnansafii@gmail.com] (a), Yingying Chen [chenyingying@qdu.edu.cn] (b,*), Salman Wahab [Maanwahab94@gmail.com] (a), Liya Zheng [767718086@qq.com] (a), Husam Rjoub [Hrjoub@ciu.edu.tr] (c)

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Gale Document Number: GALE|A668451537