The role of environmental taxes and economic growth in driving fossil fuel consumption: fresh evidence from CS-ARDL and DCCE approaches for OECD countries

BOZATLI O.

Applied Economics Letters, 2025 (SSCI, Scopus) identifier

  • Yayın Türü: Makale / Tam Makale
  • Basım Tarihi: 2025
  • Doi Numarası: 10.1080/13504851.2025.2584494
  • Dergi Adı: Applied Economics Letters
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus, IBZ Online, ABI/INFORM, EconLit, Geobase, Public Affairs Index
  • Anahtar Kelimeler: economic growth, Environmental taxes, fossil fuel consumption, OECD
  • Çukurova Üniversitesi Adresli: Evet

Özet

This study investigates the impact of environmental taxes and economic growth on fossil fuel consumption using recent panel data techniques with data covering the period 1994–2022 for 33 OECD countries. The findings indicate that environmental taxes and economic growth increase fossil fuel consumption. However, nonlinear model tests also imply the existence of an inverted U-shaped relationship between economic growth and fossil fuel consumption. Accordingly, while economic growth increases fossil fuel consumption up to a certain threshold, this effect reverses after a turning point. Robustness checks confirm the validity of the main findings and reveal that renewable energy consumption reduces fossil fuel consumption, but trade openness has no significant effect.