Sustainable development and climate action: The role of tax policy and innovation

Area of Science:

• Environmental Economics
• Climate Change Mitigation
• Sustainable Development

Background:

• Climate change impedes economic growth and Sustainable Development Goals (SDGs).
• Urgent action is needed to address climate change and achieve SDGs 09 and 13.
• Developing countries in the BRI region face unique challenges in climate mitigation.

Purpose of the Study:

• To explore the impact of government environmental tax policy, technological innovations, natural resource protection, and urbanization on climate change mitigation.
• To identify key drivers for effective climate change mitigation in BRI developing countries.
• To inform fiscal policy frameworks supporting climate action.

Main Methods:

• Panel data analysis from 16 developing countries in the BRI region.
• Novel Fourier-based econometric approach (FARD, Toda-Yamamoto Causality Test).
• Long-run and causality analysis of key variables.

Main Results:

• Government environmental tax policy positively impacts climate resilience (6%).
• Natural resource rent negatively influences climate change (-19%).
• Green technological innovations show a smaller impact (2%).

Conclusions:

• Government tax policies and natural resource protection are significant instruments for climate change mitigation.
• Fiscal policy frameworks are essential for effective implementation of environmental taxes and resource protection.
• Strengthening these areas can reduce carbon emissions and enhance progress towards SDGs 09 and 13.