Economic and environmental implications of energy taxes: Evidence from Romania

Abstract

This study investigates the relationship between the energy taxes from Romanian and several explanatory variables related to economic growth, carbon dioxide emissions, renewable and non-renewable energy in the country. After reviewing the main relevant aspects and contributions related to the relation between these variables, we launched and tested three hypotheses related to the possible causal relationship between energy taxes, gross domestic product (GDP), carbon dioxide emissions (CO2), renewable energy types and non-renewable energy by using the Johansen cointegration test and Granger causality. The Granger causality test yields evidence of a long-run Granger causality running from: GDP to energy taxes, CO2 to energy taxes, renewable energy types to energy taxes, respectively from energy taxes to CO2, renewable and non-renewable energy types. Regarding the evidence of a short-run unidirectional causal relationship between variables, there is one from CO2 and non-renewable to energy taxes, respectively from energy taxes to renewable energy types.