Environmental taxation and inclusive green growth in developing countries: does the quality of institutions matter?

This study is therefore the first attempt to examine the impact of the environmental tax on inclusive green growth for developing countries from 2000 to 2021. To do this, we apply the system generalised method of moments (GMM) that controls unobserved heterogeneity, heteroskedasticity, simultaneity, reverse causality and endogeneity. The empirical results show that environmental tax promotes inclusive green growth. In addition, our results indicate that the control of corruption, government efficiency, the quality of regulation and the rule of law interact with the environmental tax to promote inclusive green growth. Furthermore, this study reveals interestingly that the environmental tax has a positive impact on the two components of inclusive growth and green growth, but the institutional factors that accentuate the impact of the environmental tax are somewhat nuanced. The results of the study have important policy implications for decision-makers in developing countries in promoting inclusive and environmentally friendly growth.PMID:38613751 | DOI:10.1007/s11356-024-33245-6
Source: Environmental Science and Pollution Research International - Category: Environmental Health Authors: Source Type: research