Thank you for your interest in Jennifer’s recent publication, “Greening market outcomes: An empirical analysis of corrective environmental taxes OECD countries.”
Public policies and regulations that require environmental and social responsibility from business have become increasingly complex and stringent over the last several decades. To determine the overall social value of corrective environmental taxes as a policy instrument, this paper employs linear OLS regression analysis to estimate the relationship between environmentally related tax revenue and 1) total greenhouse gas (GHG) emissions and 2) corporate profit. The sample includes twenty-eight OECD countries with available data between the years 1994 and 2016 and the analysis controls for other factors known to influence GHG emissions, such as population and output growth. The results indicate that environmentally related taxes are highly correlated with reduced GHG emissions. The results also suggest a positive relationship between environmentally related taxes and corporate profit, in terms of net operating surplus. Offering more generalizable results internationally, this paper contributes to the current discourse about how to best induce more sustainable business behavior and the efficacy of taxation as a policy instrument for the environment.
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