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Environmental Tax Reform and the European Green Deal: Empirical Evidence from Panel Data Analysis

Yıl 2023, Cilt: 8 Sayı: 2, 333 - 350, 30.12.2023

Metin Dogan

https://doi.org/10.30927/ijpf.1351286

Öz

The European Green Deal, the European Union's roadmap for a green transition, was launched in 2019. With this strategy, the European Union aims to stop carbon emissions by 2050 through green policies in many sectors, especially in the energy sector. The European Union also uses various environmental tax instruments to achieve this goal. Environmental taxes, one of these instruments, are considered to have a regressive effect on employment and welfare, especially in carbon-intensive industries. In order to mitigate these negative social and economic impacts of the green transition, the European Union has implemented the Just Transition Mechanism. However, it is not known whether the Just Transition Mechanism will be sufficient after the newly introduced regulations such as the plastic tax, the Energy Tax Directive, and the Carbon Border Adjustment.
This study conducted a panel data analysis covering the period between 1994-2020 to analyze the impact of environmental taxes on employment. In this panel of 29 European countries, the dependent variable is the unemployment rate while independent variables are environmental taxes, gross domestic product, renewable energy supply and energy efficiency. As a result of this analysis, it is concluded that environmental taxes have an increasing effect on unemployment. Therefore, based on the panel data analysis, it is concluded that the Environmental Tax Reform package, which will provide double dividend in terms of both environment and employment, should be implemented in addition to the Just Transition Mechanism.

Anahtar Kelimeler

Avrupa Yeşil Düzeni Çevre Vergileri Çevre Vergisi Reformu Çifte Yarar Panel Veri Analizi

Kaynakça

  • André, F.J., Cardenete, M.A. & Velazquez, E. (2005). “Performing an Environmental Tax Reform In A Regional Economy. A Computable General Equilibrium Approach”. Ann Reg Sci 39, 375–392 (2005). https://doi.org/10.1007/s00168-005-0231-3
  • Aubert, D. & Chiroleu-Assouline, M. (2019). “Environmental Tax Reform and Income Distribution With Imperfect Heterogeneous Labour Markets”. European Economic Review, 116, 60-82. https://doi.org/10.1016/jeuroecorev.2019.03.006
  • Bayar, A. H. (1998). “Can Europe Reduce Unemployment Through Envıronmental Taxes? A General Equilibrium Analysis”. Twelfth International Conference on Input-Output Techniques International Input-Output Association. New York.
  • Bosquet, B. (2000). “Environmental Tax Reform: Does It Work? A Survey Of The Empirical Evidence”. Ecological Economics, 34(1), 19-32. https://doi.org/10.1016/S0921-8009(00)00173-7.
  • Bovenberg, A.L. (1995). “Environmental Taxation and Employment”. De Economist 143, 111–140. https://doi.org/10.1007/BF01384532
  • Bovenberg, A. & Mooij, R. A. (1997). “Environmental Tax Reform and Endogenous Growth”. Journal of Public Economics, 63(2), 207–237. doi:10.1016/s0047-2727(96)01596-4
  • Böhringer, C., Garcia-Muros, X. & Gonzalez-Eguino, M. (2019). Greener and Fairer: A Progressive Environmental Tax Reform For Spain. Oldenburg Discussion Papers in Economics, No. V-418-19, University of Oldenburg, Department of Economics, Oldenburg.
  • Canpolat Bıcakcı S. (2017). “Çevre Vergilerinin Araçsallığı Üzerine Bir Değerlendirme”. Gazi Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Gazi Akademi Genç Sosyal Bilimciler Sempozyumu 2017 Özel Sayısı, 348-369.
  • Ciaschini, M., Pretaroli, R., Severini, F. & Socci, C. (2012). “Regional Double Dividend from Environmental Tax Reform: An Application for The Italian Economy”. Research in Economics, 66(3), 273–283.
  • Carraro, C., Galeotti, M., & Gallo, M. (1996). “Environmental Taxation and Unemployment: Some Evidence on The Double Dividend Hypothesis in Europe”. Journal of Public Economics, 62(1-2), 141–181.
  • Carvalho, N. & Guillen J. (2021). “Economic Impact of Eliminating the Fuel Tax Exemption in the EU Fishing Fleet”, Sustainability, 13(2719), 1-15. https://doi.org/10.3390/su13052719
  • Chiroleu-Assouline, M. & Fodha, M. (2014). “From Regressive Pollution Taxes to Progressive Environmental Tax Reforms”. European Economic Review, 69, 126-142. https://doi.org/10.1016/j.euroecorev.2013.12.006.
  • Daitoh, I. & Omote, M. (2011). “The Optimal Environmental Tax and Urban Unemployment in an Open Economy”. Review of Development Economics, 15, 168-179. https://doi.org/10.1111/j.1467-9361.2010.00600.x
  • Delgado, F., Freire-Gonzalez, J. & Presno, M.J. (2022), “Environmental Taxation In The European Union: Are There Common Trends?”. Economic Analysis and Policy, 73, 670-682, https://doi.org/10.1016/j.eap.2021.12.019.
  • Droege, S. & Fischer, C. (2020). Pricing Carbon at the Border: Key Questions for the EU. ifo Institut - Leibniz-Institut für Wirtschaftsforschung an der Universität München, 18(01), 30-34.
  • Domguia, E. N., Pondie, T.M., Ngounou, B.A. & Nkengfack, H. (2022). “Does Environmental Tax Kill Employment? Evidence From OECD And Non-OECD Countries”, Journal of Cleaner Production, 380(1), 134873, https://doi.org/10.1016/j.jclepro.2022.134873.
  • Douenne, T. & Fabre, A. (2022), "Yellow Vests, Pessimistic Beliefs, and Carbon Tax Aversion." American Economic Journal: Economic Policy, 14(1), 81-110.
  • Ekins, P., Summerton, P., Thoung, C. & Lee, D. (2011), “A Major Environmental Tax Reform for the UK: Results for the Economy, Employment and the Environment”. Environ Resource Econ, 50, 447-474. doi 10.1007/s10640-011-9484-8.
  • European Commission (2019). The European Green Deal. Brüksel, https://ec.Europa.eu/info/sites/info/files/European-green-deal communication_en.pdf., Accessed on: 21.05.2023
  • European Commission (2021). Making Energy Taxation Greener. https://ec.europa.eu/ commission/presscorner/detail/en/fs_21_3667, Accessed on: 24.05.2023
  • Eurostat Data (2023). Energy Efficiency, https://ec.europa.eu/eurostat/cache/ metadata/en/nrg_ind_eff_esmsip2.htm, Accessed on 04 August 2023
  • Falcao, T. (2020), “Toward Carbon Tax Internationalism: The EU Border Carbon Adjustment Proposal”. Tax Notes International, 98(9), https://ssrn.com/abstract=3827522
  • Hafstead, M.A.C. & Williams, R. C. (2018). “Unemployment and Environmental Regulation In General Equilibrium”. Journal of Public Economics, 160, 50-65. https://doi.org/10.1016/j.jpubeco.2018.01.013.
  • Heine, D. & Black, S. (2018). “Benefits beyond Climate: Environmental Tax Reform”. In Pigato, M. A. (ed.), Fiscal Policies for Development and Climate Action, https://doi.org/10.1596/978-1-4648-1358-0_ch1
  • Holmlund, B. & Kolm, A.-S. (2000). “AS. Environmental Tax Reform in a Small Open Economy With Structural Unemployment”. International Tax and Public Finance, 7, 315–33. https://doi.org/10.1023/A:1008757830467
  • Keen, M., Parry, I. & Roaf, J. (2022). “Border Carbon Adjustments: Rationale, Design And Impact”. Fiscal Studies, 43, 209– 234. https://doi.org/10.1111/1475-5890.12307.
  • Kuralbayeva, K. (2019), “Environmental Taxation, Employment and Public Spending in Developing Countries”. Environ Resource Econ, 72, 877–912. https://doi.org/10.1007/s10640-018-0230-3
  • Maxim, M & Zander, K. (2019), “Can a Green Tax Reform Entail Employment Double Dividend in European and Non-European Countries? A Survey of the Empirical Evidence”. International Journal of Energy Economics and Policy, 9(3), 218-228.
  • Metcalf, G, E. & James H. S. (2020). "Measuring the Macroeconomic Impact of Carbon Taxes". AEA Papers and Proceedings, 110, 101-106.
  • OECD (2022). Global Plastic Waste Set To Almost Triple By 2060, https://www.oecd.org/newsroom/global-plastic-waste-set-to-almost-triple-by-2060.htm
  • OECD (2023-a). Environmental tax (indicator). doi: 10.1787/5a287eac-en (Accessed on 04 August 2023)
  • OECD (2023-b). Gross domestic product (GDP) (indicator). doi: 10.1787/dc2f7aec-en (Accessed on 04 August 2023)
  • OECD (2023-c). Renewable energy (indicator). doi: 10.1787/aac7c3f1-en (Accessed on 04 August 2023)
  • OECD (2023-d). Unemployment rate (indicator). doi: 10.1787/52570002-en (Accessed on 08 December 2023)
  • Ortega-Gil, M., Cortes-Sierra, G. & Elhichou-Ahmed, C. (2021), “The Effect of Environmental Degradation”. Climate Change, and the European Green Deal Tools on Life Satisfaction, 14(18), 1-14. https://doi.org/10.3390/en14185839
  • Patuelli, R., Nijkamp, P. & Pels, E. (2004). “Environmental Tax Reform and The Double Dividend: A Meta-Analytical Performance Assessment”. Ecological Economics, 55(4), 564-583, https://doi.org/10.1016/j.ecolecon.2004.12.021
  • Pesaran, M.H. (2004). General Diagnostic Tests for Cross-Section Dependence In Panels. University of Cambridge Faculty of Economics, Cambridge Working Papers in Economics No. 0435, https://link.springer.com/article/10.1007%2Fs00181-020-01875-7
  • Pesaran, H. M. (2007). “A Simple Panel Unit Root Test In The Presence Of Cross-Section Dependence”. Journal of Applied Econometrics, 22, 265 312.
  • Pesaran, M. H., & Yamagatai T. (2008). “Testing Slope Homogeneity In Large Panels”. Journal of Econometrics, 142(1), 50–93.
  • Scuderi, E. (2021). Towards A Plastic-Free Economy: The Italian Plastic Tax. Rivista Telematica di Diritto Tributario. SSRN: https://ssrn.com/abstract=3822296, Accesed on: 20.07.2023
  • Siddi, M. (2020). The European Green Deal: Assessing Its Current State And Future Implementation. FIIA Working paper 114, https://www.fiia.fi/wp-content/uploads/2020/05/wp114_European-green-deal.pdf.
  • Walker, T., Gramlich, D. &Dumont-Bergeron, A. (2020). "The Case for a Plastic Tax: A Review of Its Benefits and Disadvantages Within a Circular Economy". Sustainability, Business and Society, 360(4), 185-211. https://doi.org/10.1108/S2514-175920200000004010
  • Westerlund, J. (2007). “Testing for Error Correction in Panel Data”. Oxford Bulletin of Economics and Statistics, 69, 709-748.
  • World Bank Data (2023). Unemployment, total (% of total labor force) (modeled ILO estimate). https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS, (Accessed on 04 August 2023)
  • Wolf, S., Teitge, J., Mielke, J., Schütze, F. & Jaeger, C. (2021). “The European Green Deal — More Than Climate Neutrality”. Intereconomics, 56, 99–107. https://doi.org/10.1007/s10272-021-0963-z
  • Yip, C. M. (2018). “On The Labor Market Consequences of Environmental Taxes”. Journal of Environmental Economics and Management, 89, 136-152. https://doi.org/10.1016/j.jeem.2018.03.004.

Environmental Tax Reform and the European Green Deal: Empirical Evidence from Panel Data Analysis

Yıl 2023, Cilt: 8 Sayı: 2, 333 - 350, 30.12.2023

Metin Dogan

https://doi.org/10.30927/ijpf.1351286

Öz

The European Green Deal, the European Union's roadmap for a green transition, was launched in 2019. With this strategy, the European Union aims to stop carbon emissions by 2050 through green policies in many sectors, especially in the energy sector. The European Union also uses various environmental tax instruments to achieve this goal. Environmental taxes, one of these instruments, are considered to have a regressive effect on employment and welfare, especially in carbon-intensive industries. In order to mitigate these negative social and economic impacts of the green transition, the European Union has implemented the Just Transition Mechanism. However, it is not known whether the Just Transition Mechanism will be sufficient after the newly introduced regulations such as the plastic tax, the Energy Tax Directive, and the Carbon Border Adjustment.
This study conducted a panel data analysis covering the period between 1994-2020 to analyze the impact of environmental taxes on employment. In this panel of 29 European countries, the dependent variable is the unemployment rate while independent variables are environmental taxes, gross domestic product, renewable energy supply and energy efficiency. As a result of this analysis, it is concluded that environmental taxes have an increasing effect on unemployment. Therefore, based on the panel data analysis, it is concluded that the Environmental Tax Reform package, which will provide double dividend in terms of both environmental and employment, should be implemented in addition to the Just Transition Mechanism.

Anahtar Kelimeler

European Green Deal Environmental Taxes Environmental Tax Reform Double Dividend Panel Data Analysis

Kaynakça

  • André, F.J., Cardenete, M.A. & Velazquez, E. (2005). “Performing an Environmental Tax Reform In A Regional Economy. A Computable General Equilibrium Approach”. Ann Reg Sci 39, 375–392 (2005). https://doi.org/10.1007/s00168-005-0231-3
  • Aubert, D. & Chiroleu-Assouline, M. (2019). “Environmental Tax Reform and Income Distribution With Imperfect Heterogeneous Labour Markets”. European Economic Review, 116, 60-82. https://doi.org/10.1016/jeuroecorev.2019.03.006
  • Bayar, A. H. (1998). “Can Europe Reduce Unemployment Through Envıronmental Taxes? A General Equilibrium Analysis”. Twelfth International Conference on Input-Output Techniques International Input-Output Association. New York.
  • Bosquet, B. (2000). “Environmental Tax Reform: Does It Work? A Survey Of The Empirical Evidence”. Ecological Economics, 34(1), 19-32. https://doi.org/10.1016/S0921-8009(00)00173-7.
  • Bovenberg, A.L. (1995). “Environmental Taxation and Employment”. De Economist 143, 111–140. https://doi.org/10.1007/BF01384532
  • Bovenberg, A. & Mooij, R. A. (1997). “Environmental Tax Reform and Endogenous Growth”. Journal of Public Economics, 63(2), 207–237. doi:10.1016/s0047-2727(96)01596-4
  • Böhringer, C., Garcia-Muros, X. & Gonzalez-Eguino, M. (2019). Greener and Fairer: A Progressive Environmental Tax Reform For Spain. Oldenburg Discussion Papers in Economics, No. V-418-19, University of Oldenburg, Department of Economics, Oldenburg.
  • Canpolat Bıcakcı S. (2017). “Çevre Vergilerinin Araçsallığı Üzerine Bir Değerlendirme”. Gazi Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Gazi Akademi Genç Sosyal Bilimciler Sempozyumu 2017 Özel Sayısı, 348-369.
  • Ciaschini, M., Pretaroli, R., Severini, F. & Socci, C. (2012). “Regional Double Dividend from Environmental Tax Reform: An Application for The Italian Economy”. Research in Economics, 66(3), 273–283.
  • Carraro, C., Galeotti, M., & Gallo, M. (1996). “Environmental Taxation and Unemployment: Some Evidence on The Double Dividend Hypothesis in Europe”. Journal of Public Economics, 62(1-2), 141–181.
  • Carvalho, N. & Guillen J. (2021). “Economic Impact of Eliminating the Fuel Tax Exemption in the EU Fishing Fleet”, Sustainability, 13(2719), 1-15. https://doi.org/10.3390/su13052719
  • Chiroleu-Assouline, M. & Fodha, M. (2014). “From Regressive Pollution Taxes to Progressive Environmental Tax Reforms”. European Economic Review, 69, 126-142. https://doi.org/10.1016/j.euroecorev.2013.12.006.
  • Daitoh, I. & Omote, M. (2011). “The Optimal Environmental Tax and Urban Unemployment in an Open Economy”. Review of Development Economics, 15, 168-179. https://doi.org/10.1111/j.1467-9361.2010.00600.x
  • Delgado, F., Freire-Gonzalez, J. & Presno, M.J. (2022), “Environmental Taxation In The European Union: Are There Common Trends?”. Economic Analysis and Policy, 73, 670-682, https://doi.org/10.1016/j.eap.2021.12.019.
  • Droege, S. & Fischer, C. (2020). Pricing Carbon at the Border: Key Questions for the EU. ifo Institut - Leibniz-Institut für Wirtschaftsforschung an der Universität München, 18(01), 30-34.
  • Domguia, E. N., Pondie, T.M., Ngounou, B.A. & Nkengfack, H. (2022). “Does Environmental Tax Kill Employment? Evidence From OECD And Non-OECD Countries”, Journal of Cleaner Production, 380(1), 134873, https://doi.org/10.1016/j.jclepro.2022.134873.
  • Douenne, T. & Fabre, A. (2022), "Yellow Vests, Pessimistic Beliefs, and Carbon Tax Aversion." American Economic Journal: Economic Policy, 14(1), 81-110.
  • Ekins, P., Summerton, P., Thoung, C. & Lee, D. (2011), “A Major Environmental Tax Reform for the UK: Results for the Economy, Employment and the Environment”. Environ Resource Econ, 50, 447-474. doi 10.1007/s10640-011-9484-8.
  • European Commission (2019). The European Green Deal. Brüksel, https://ec.Europa.eu/info/sites/info/files/European-green-deal communication_en.pdf., Accessed on: 21.05.2023
  • European Commission (2021). Making Energy Taxation Greener. https://ec.europa.eu/ commission/presscorner/detail/en/fs_21_3667, Accessed on: 24.05.2023
  • Eurostat Data (2023). Energy Efficiency, https://ec.europa.eu/eurostat/cache/ metadata/en/nrg_ind_eff_esmsip2.htm, Accessed on 04 August 2023
  • Falcao, T. (2020), “Toward Carbon Tax Internationalism: The EU Border Carbon Adjustment Proposal”. Tax Notes International, 98(9), https://ssrn.com/abstract=3827522
  • Hafstead, M.A.C. & Williams, R. C. (2018). “Unemployment and Environmental Regulation In General Equilibrium”. Journal of Public Economics, 160, 50-65. https://doi.org/10.1016/j.jpubeco.2018.01.013.
  • Heine, D. & Black, S. (2018). “Benefits beyond Climate: Environmental Tax Reform”. In Pigato, M. A. (ed.), Fiscal Policies for Development and Climate Action, https://doi.org/10.1596/978-1-4648-1358-0_ch1
  • Holmlund, B. & Kolm, A.-S. (2000). “AS. Environmental Tax Reform in a Small Open Economy With Structural Unemployment”. International Tax and Public Finance, 7, 315–33. https://doi.org/10.1023/A:1008757830467
  • Keen, M., Parry, I. & Roaf, J. (2022). “Border Carbon Adjustments: Rationale, Design And Impact”. Fiscal Studies, 43, 209– 234. https://doi.org/10.1111/1475-5890.12307.
  • Kuralbayeva, K. (2019), “Environmental Taxation, Employment and Public Spending in Developing Countries”. Environ Resource Econ, 72, 877–912. https://doi.org/10.1007/s10640-018-0230-3
  • Maxim, M & Zander, K. (2019), “Can a Green Tax Reform Entail Employment Double Dividend in European and Non-European Countries? A Survey of the Empirical Evidence”. International Journal of Energy Economics and Policy, 9(3), 218-228.
  • Metcalf, G, E. & James H. S. (2020). "Measuring the Macroeconomic Impact of Carbon Taxes". AEA Papers and Proceedings, 110, 101-106.
  • OECD (2022). Global Plastic Waste Set To Almost Triple By 2060, https://www.oecd.org/newsroom/global-plastic-waste-set-to-almost-triple-by-2060.htm
  • OECD (2023-a). Environmental tax (indicator). doi: 10.1787/5a287eac-en (Accessed on 04 August 2023)
  • OECD (2023-b). Gross domestic product (GDP) (indicator). doi: 10.1787/dc2f7aec-en (Accessed on 04 August 2023)
  • OECD (2023-c). Renewable energy (indicator). doi: 10.1787/aac7c3f1-en (Accessed on 04 August 2023)
  • OECD (2023-d). Unemployment rate (indicator). doi: 10.1787/52570002-en (Accessed on 08 December 2023)
  • Ortega-Gil, M., Cortes-Sierra, G. & Elhichou-Ahmed, C. (2021), “The Effect of Environmental Degradation”. Climate Change, and the European Green Deal Tools on Life Satisfaction, 14(18), 1-14. https://doi.org/10.3390/en14185839
  • Patuelli, R., Nijkamp, P. & Pels, E. (2004). “Environmental Tax Reform and The Double Dividend: A Meta-Analytical Performance Assessment”. Ecological Economics, 55(4), 564-583, https://doi.org/10.1016/j.ecolecon.2004.12.021
  • Pesaran, M.H. (2004). General Diagnostic Tests for Cross-Section Dependence In Panels. University of Cambridge Faculty of Economics, Cambridge Working Papers in Economics No. 0435, https://link.springer.com/article/10.1007%2Fs00181-020-01875-7
  • Pesaran, H. M. (2007). “A Simple Panel Unit Root Test In The Presence Of Cross-Section Dependence”. Journal of Applied Econometrics, 22, 265 312.
  • Pesaran, M. H., & Yamagatai T. (2008). “Testing Slope Homogeneity In Large Panels”. Journal of Econometrics, 142(1), 50–93.
  • Scuderi, E. (2021). Towards A Plastic-Free Economy: The Italian Plastic Tax. Rivista Telematica di Diritto Tributario. SSRN: https://ssrn.com/abstract=3822296, Accesed on: 20.07.2023
  • Siddi, M. (2020). The European Green Deal: Assessing Its Current State And Future Implementation. FIIA Working paper 114, https://www.fiia.fi/wp-content/uploads/2020/05/wp114_European-green-deal.pdf.
  • Walker, T., Gramlich, D. &Dumont-Bergeron, A. (2020). "The Case for a Plastic Tax: A Review of Its Benefits and Disadvantages Within a Circular Economy". Sustainability, Business and Society, 360(4), 185-211. https://doi.org/10.1108/S2514-175920200000004010
  • Westerlund, J. (2007). “Testing for Error Correction in Panel Data”. Oxford Bulletin of Economics and Statistics, 69, 709-748.
  • World Bank Data (2023). Unemployment, total (% of total labor force) (modeled ILO estimate). https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS, (Accessed on 04 August 2023)
  • Wolf, S., Teitge, J., Mielke, J., Schütze, F. & Jaeger, C. (2021). “The European Green Deal — More Than Climate Neutrality”. Intereconomics, 56, 99–107. https://doi.org/10.1007/s10272-021-0963-z
  • Yip, C. M. (2018). “On The Labor Market Consequences of Environmental Taxes”. Journal of Environmental Economics and Management, 89, 136-152. https://doi.org/10.1016/j.jeem.2018.03.004.
Toplam 46 adet kaynakça vardır.

Ayrıntılar

Birincil Dil İngilizce
Konular Maliye Kuramı
Bölüm Araştırma Makalesi
Yazarlar

Metin Dogan 0000-0002-5832-7212

Yayımlanma Tarihi 30 Aralık 2023
Gönderilme Tarihi 28 Ağustos 2023
Kabul Tarihi 14 Aralık 2023
Yayımlandığı Sayı Yıl 2023 Cilt: 8 Sayı: 2

Kaynak Göster

APA Dogan, M. (2023). Environmental Tax Reform and the European Green Deal: Empirical Evidence from Panel Data Analysis. International Journal of Public Finance, 8(2), 333-350. https://doi.org/10.30927/ijpf.1351286
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