The impact of environment and energy policies on sustainable development: The case of EU countries

The increases in environmental degradation and the depletion of natural resources have highlighted the importance of sustainable development since the Industrial Revolution. The aim of this study is to analyze the short and long-term effect of environmental and energy policies on sustainable development in 27 European Union (EU) countries between 2000 and 2021. The findings of the causality analysis indicate a bilateral causality among environmental taxes, energy productivity, renewable energy consumption, and sustainable development. On the other hand, the long-term cointegration coefficients show that energy productivity and renewable energy positively impact sustainable development at panel level, but environmental taxes do not have a significant effect on sustainable development. However, country level cointegration coefficients indicate that effect of environmental taxes, energy productivity, and renewable energy consumption differs among the EU member states.