Speakers
Description
Background: The EU plays a key role in the global response to climate change by applying various mitigation instruments of legal, fiscal, and policy nature. On top of this list, environmental taxation is the central strategy to combat pollution while rewarding sustainable customs. Still, the lengths to which this revenue has the desired effect are unknown.
Brief Literature Review: The EU's efforts against climate change have made it gain the spotlight in the complex interplay between climate change risks and environmental governance. The first is a policy breakdown that tackles the keystones in global climate governance. To understand how world governments fail in the battle against climate change, we relied on bibliometric research via VOSviewer.
Objective: The primary aim of this study is to examine the interplay between environmental tax revenue regulations and their impact on harmful emissions in the EU. The affinity between environmental fiscal strategies and climate change drivers requires a delicate yet concise plan. In terms of analysis, we aim to assess whether environmental taxation is an effective lever for emission reduction and supports the goals of climate resilience and green economic change.
Methodology: A multi-methodological approach was employed. First, a comprehensive policy analysis and bibliometric review were conducted to contextualise EU climate strategies and identify relevant academic contributions. The empirical component utilises panel data for all states over 2012–2021. The leading indicators are environmental tax revenue, CO₂ footprint, GHG emissions, renewable energy consumption, employment in environmental sectors, and GDP/capita. These components helped us to conceive the graphical descriptive analysis followed by econometric modelling using Ordinary Least Squares, Fixed Effects, and Random Effects regressions. A Hausman test was applied to determine the preferred model. Statistical analysis was conducted using EViews.
Results: Our analysis offers valuable insights into the environmental performance of EU countries. In the policy analysis, we discovered that the measures proposed towards a path to sustainability usually combine fiscal policies such as the Carbon Border Adjustment Mechanism (CBAM) or (Effort Sharing Regulation) ESR. The bibliometric study gave a deeper perspective into the interplay between environmental sustainability and the economic impact on emissions. Our study also presents valuable graphical representations of our variables. The correlation matrix offers insights into the relationships between our variables. Furthermore, we employed an economic model to understand better how climate change risks impact the ecosystem, and a Hausman specification test—yielding a p-value below 5%—indicated that the Fixed Effects model is preferred over the Random Effects model.
Conclusion: The study underscores the importance of national implementation and policy coherence in achieving targets.
