Empirical Evidence on the Effectiveness of Environmental Taxes

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The aim of this study is to determine whether environmental taxes affect levels of pollution and energy consumption. Using a panel of EU members and Norway, we find a significant negative relationship between taxes and pollution, but no relationship with energy consumption. A further contribution to the literature involves the use of the Arellano-Bover approach to dynamic panels, to account for the potential partial adjustment towards desired or target levels of pollution and energy usage. The results provide evidence of partial adjustment, as well as evidence of the negative relationship between environmental taxes and pollution.
Original languageEnglish
Place of PublicationBath, U. K.
PublisherDepartment of Economics, University of Bath
Publication statusPublished - Feb 2010

Publication series

NameBath Economics Research Working Papers


  • partial adjustment
  • dynamic panel
  • pollution
  • environmental tax
  • energy


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