Advancing carbon neutrality agenda: Does governance quality and environmental tax matter? Evidence from novel MMQR and heterogeneous analysis
摘要
In this study, we investigate the conditional heterogeneous impact of environmental taxes and governance on carbon emissions among 23 African nations, considering the moderating impact of governance quality. The study employs Method of Moments Quantile Regression (MMQR) with hierarchical regression for robustness over the period 1994–2020. To address potential endogeneity, we employ 2SLS estimations and consider lagged effects. The findings indicate that the impact of environmental taxes on carbon emissions varies across all distributions of carbon emissions. The coefficient of environmental tax is significantly negative. The result shows a positive impact of governance on carbon emissions. The study finds a significantly positive interaction effect of governance and environmental tax on carbon emissions. The findings support green dividends but cannot validate neoclassical theory. The findings suggest that the role of governance in the nexus between environmental tax and carbon emissions is weak. Policymakers should consider their countries’ emission levels before rolling out environmentally related taxes to champion the carbon neutrality agenda. While implementing environmental taxes, policymakers must concentrate on strengthening their institutional capacities to monitor compliance and facilitate public engagement.