Examining the environmental tax and the fishing grounds footprint nexus: Case of the African fishing industry

Abstract

AbstractThe implementation of environmental stringent policies faces a trade‐off between ensuring livelihood sustainability and reducing global fishing footprints. This study investigates the impact of environmental tax on fishing footprints in 23 African countries from 2000 to 2018, using the smoothed instrumental‐variables quantile regression approach. The need to establish a sustainable fishing business in Africa, considering the growing fishing footprint, and investigate if environmental levies could help achieve this goal are the driving forces behind this study. The findings reveal that environmental tax reduces footprints in African fishing grounds up to the 0.75th quantile, beyond which its impact remains insignificant in its conditional distribution. More importantly, environmental tax stringency‐reducing impacts are only apparent in the coastal and middle‐income groups up to the 0.90th and 0.50th quantiles, respectively. Environmental tax appeared to only contribute to reducing fishing footprints beyond the 0.75th quantile with higher levels of pollution tax across its conditional distribution in landlocked countries, but remaining insignificant in the low‐income group. The insignificant impact on the low‐income group is due to relatively relaxed environmental regulations that are unable to address the ecological deficit. The findings further indicate that digital infrastructures and financial development can contribute to enhancing fishing grounds biocapacity, in promoting environmental awareness and ecofriendly strategies. These findings are significant because they show that, regardless of whether environmental standards are governed by common law or civil law legal systems, environmental taxes can be utilized to stop deleterious ecoenvironmental practices within the African fishing industry. The study recommends that policy makers adopt more stringent environmental regulations, particularly for the landlocked countries, whose limited fishery grounds biocapacity has dropped in recent years.