The relationship between environmental taxes and carbon emission: The case of Türkiye

As the world's population increases, so do human needs and human-induced pollution. This situation causes serious problems such as global warming, disruption of biological balance, and increasing environmental pollution worldwide. Reducing greenhouse gas emissions have great importance to prevent climate change. Many environmental problems, such as air pollution, are among the most common problems that make countries responsible to each other in the globalizing world. Countries take various measures, such as subsidies, regulations, and economic instruments, to reduce these emissions. However, while there is disagreement on which instruments are most effective, there has been a recent increase in interest in environmental taxes. Such taxes are used not only to raise revenue but also to reduce environmental pollution and carbon emissions. The main objective of this study is to investigate the impact of environmental taxes on carbon emissions. In this study, the cointegration relationship between environmental taxes, globalization, economic growth and energy consumption on CO₂ emissions in the Turkish economy is examined by ARDL bounds test using 1994-2021 annual data. Empirical results reveal that environmental taxes reduce carbon emissions, while globalization and energy consumption increase carbon emissions. In addition, according to the findings of the study, the effect of economic growth on carbon emissions is statistically insignificant.