The effects of environmental public fiscal policies on sustainable development: An emprical analysis on selected OECD countries

The concept of sustainable development covers a wide area with its environmental, economic and social dimensions. Today, the environmental dimension of sustainable development is emphasized more than its economic dimension. Especially in recent years, with negative developments such as climate change and global warming, it seems that what can be done for environmental sustainability has become more prominent. It is known that many countries in the global arena are taking actions to prevent environmental problems for sustainability. In this study, it is aimed to empirically investigate the effectiveness of various public financial policies in eliminating environmental problems in line with the concerns about ensuring environmentally sustainable development today and to make some fiscal policy recommendations in the light of the results to be obtained. Accordingly, the impact of public fiscal policy instruments on environmental sustainability was empirically investigated for 24 OECD countries over the period 1995-2021. In the study, the effects of fiscal instruments such as environmental taxes and environmental protection expenditures on the ecological footprint, which is an indicator of environmental pollution, were analyzed with different models. More clearly, in this study, the effects of environmental taxes, environmental protection expenditures, economic growth and renewable energy consumption on the ecological footprint were investigated. Empirical research results indicate that environmental taxes and renewable energy reduce the ecological footprint, economic growth increases the ecological footprint, and finally, environmental protection expenditures do not have a statistically significant effect. Therefore, we can say that environmental taxes and renewable energy contribute to environmental sustainability by reducing environmental pollution. More clearly, the empirical results prove the impact of environmental taxes, one of the selected fiscal instruments, in reducing environmental pollution and ensuring environmental sustainability. This result demonstrates the importance of environmental taxes, a public fiscal instrument, in achieving environmental sustainability. According to the results, it is possible to say that renewable energy is effective in ensuring environmental sustainability by creating an ameliorative effect on environmental problems. Again, according to empirical results, it is possible to say that economic growth prevents environmental sustainability by increasing environmental pollution, and that environmental protection expenditures, contrary to expectations, are not an effective policy tool on the environment.