The role of environmental taxes on the energy use: Evidence from G7 countries
Year: 2026
Type: article
Abstract: • This study provides a quantitative assessment of how environmental taxes, income levels, renewable energy use, and environment-related technological innovation are linked to non-renewable energy consumption. • The empirical results indicate that environmental taxes are associated with a statistically significant reduction in non-renewable energy use. • Increases in GDP per capita are found to coincide with higher demand for non-renewable energy sources. • Greater reliance on renewable energy is seen to significantly lower non-renewable energy consumption. • Environment-related technological innovation emerges as an important factor contributing to the reduction of non-renewable energy use. Reducing non-renewable energy consumption is fundamental for a sustainable environment and development. Assessing the factors that drive energy consumption is vital. This study analyzes the role of environmental taxes (ETAX), per capita gross domestic product (GDP), renewable energy consumption (REC), and environmental technological innovations (ETC) on non-renewable energy consumption (EU) in G7 economies. The study employs Autoregressive AR(1) specifications to account for serial correlation and utilizes heteroskedasticity-resistant Applicable Generalized Least Squares (FGLS) and Panel Adjusted Standard Errors (PCSE) estimators as basic econometric approaches to yield long-run empirical estimates for the period 1995-2021.The study's findings indicate that environmental taxes, environmental technologies, and increased renewable energy consumption negatively affect non-renewable energy consumption and positively affect per capita GDP growth. The study's policy implications emphasize that G-7 countries should reduce their energy consumption, increase energy efficiency, and strengthen their environmental policies.
Source: Energy Nexus
Author: Derya Yayman
Institution: Akdeniz University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $2,200
OpenAlex ID: W7128427767