800
Views
15
CrossRef citations to date
0
Altmetric
Articles

On the interaction between fiscal policy and CO2 emissions in G7 countries: 1875–2016

ORCID Icon & ORCID Icon
Pages 196-217 | Received 19 Mar 2021, Accepted 28 Jun 2021, Published online: 06 Jul 2021
 

ABSTRACT

This study examines the impact of fiscal policy and economic growth on CO2 emissions employing a bootstrap causality test in the frequency domain. Analysing a long time series of data from 1875 to 2016 for G7 countries, we mainly aim to investigate the validity of the environmental Kuznets curve (EKC) hypothesis and whether fiscal policy affects the environment. The findings of causality from government expenditures to CO2 emissions are time-varying. However, the causality from economic growth to CO2 emissions follows a stable path and does not change over time in all countries except Canada. Since causal relations follow a consistent line and do not confirm an inverted U-shaped relationship between economic growth and environmental pollution, the EKC hypothesis does not hold in the G7 countries, implying that environmental problems are not automatically solved. The results also suggest that fiscal policy can contribute to climate change mitigation at different points in time.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The datasets analysed during the current study are available from the corresponding author on reasonable request.

Notes

1 Since Germany’s GEX data began in 1950, we test the null hypothesis of causality for the CO2-GEX relationship over the period 1950–2016 for Germany.

Log in via your institution

Log in to Taylor & Francis Online

PDF download + Online access

  • 48 hours access to article PDF & online version
  • Article PDF can be downloaded
  • Article PDF can be printed
USD 61.00 Add to cart

Issue Purchase

  • 30 days online access to complete issue
  • Article PDFs can be downloaded
  • Article PDFs can be printed
USD 346.00 Add to cart

* Local tax will be added as applicable

Related Research

People also read lists articles that other readers of this article have read.

Recommended articles lists articles that we recommend and is powered by our AI driven recommendation engine.

Cited by lists all citing articles based on Crossref citations.
Articles with the Crossref icon will open in a new tab.