Environmental taxation and unemployment: An evaluation in terms of the double dividend hypothesis

Negative situations such as climate change, drought, and resource depletion that occur with globalization; it has become increasingly important since the 1970s, forcing societies to struggle with these problems. In combating these problems; environmental taxes have a very important role in minimizing environmental damage, protecting natural resources and creating a more livable and healthy environment. In addition to the environmental benefits to be obtained through environmental taxes; the idea that unemployment, which is another important problem in many countries, can be combated has become increasingly important. This situation, called the double dividend hypothesis; it explains that taxes collected on labor and capital negatively affect employment, and that the employment-increasing effect that occurs when the revenues obtained from environmental taxes are used to reduce the tax burden on these production factors. In this context, the study generally focuses on the role of environmental taxes on sustainable development and the policies and targets determined in this direction. In the study where environmental taxes were evaluated within the scope of the double dividend hypothesis, the effect of environmental taxes on employment was analyzed with panel time series. The findings obtained in the empirical analysis using panel cointegration and panel VAR models show that environmental taxes have a significant and positive effect on employment. Therefore, it has been concluded that the double dividend hypothesis is valid within the scope of the period and countries examined.