On the Way to Net Zero Emissions: Can Environmental Tax be the Game Changer? The Vise Grad Group Evidence

Abstract

Today, protecting the environment is a top issue for global policy. In essence, the literature has identified several macroeconomic problems as factors in environmental deterioration. The purpose of the investigation was to explore environmental deterioration (EVD) and energy consumption (ENC) by Vise grad regions. Environmental taxes (ENTX) and carbon taxes have been proving to be a significant factor in carbon mitigation. The analysis was carried out for the period 1994-2021, employing the fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS). The empirical evaluation indicates that ENC had a positive while ENTX had a negative nexus with EVD for the Vise grad nations. Similarly, the moderating role of ENTX*ENC – EVD exhibited an inverse affiliation. In the long run, the dependence on non-renewable energy appreciates EVD. However, effective policy implementation of ENTX will lead to quality of the environment. The empirical results have shown that ENTX can be employed to control the demand and utilization of coal, gas, and nuclear in the Vise grad regions. This research offers policymakers and government organizations in these areas a reference point for their investments in more eco-friendly technology, human capital, urbanization, trade openness, and appropriate environmental levies to demonstrate the quality of the environment.