Do energy transition and environmental taxation contribute to sustainable development? Evidence from OECD countries

Abstract

PurposeIn this study, the author intend to investigate the impacts of renewable energy use and environmental taxation on sustainable development measured by the adjusted net savings (ANS).Design/methodology/approachThis study employs the quantile regression (QR) for a set of 24 Organization for Cooperation and Economic Development (OECD) countries over the period 1994–2018.FindingsThe main empirical findings of estimates show that access to renewable energy and environmental taxation generate positive and significant effects in increasing the ANS for most quantiles. Hence, they are practical tools for achieving sustainable development goals (SDGs).Practical implicationsThis study has important implications for governments and policymakers of the OECD countries. Therefore, governments can use subsidies and incentives to promote the adoption of renewable energy sources, energy-efficient technologies and sustainable practices. Similarly, by imposing taxes on pollution and resource use, governments can encourage the adoption of cleaner technologies and practices toward more sustainable behavior.Originality/valueThis paper is based on a novel measure of sustainable development (ANS) and a novel econometric method (QR).