The Relationship between Environmental Taxation, Environmental Performance and Economic Growth: Comparative Study of Sweden and China 1985-2016

Pinglin He, Ying Zhang, Yuan Yuan, Ya Qiao, Lizhu Xin, Xiaonan Zou

Ekoloji, 2019, Issue 107, Pages: 401-410, Article No: e107050


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This paper explores the relationship between environmental tax, environmental performance and economic development in China and Sweden using time series data over the period 1985–2016. The mainly research method is constructive study method and this study mainly aims at improving environmental tax system of China. We performed ARDL Bound test to see if there is evidence of a long run relationship. Based on the results, we found that both countries have cointegrating vectors. Moreover, by setting up ARDL-ECM model we find out the triadic relation and testify the EKC theory and Double Dividend theory existing or not in China and Sweden. The Granger causality tells us environmental tax in China does not play a role in reducing carbon dioxide, environmental tax benefits to economic growth and economic growth of China will weaken growth of carbon emission but the function is not significant. To ameliorate this condition, governments should accelerate public relative environmental tax policy especially carbon tax to decrease emission of carbon without restricting growth of economy.


environmental performance, ARDL bound, EKC theory, double dividend theory, emission of carbon


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