National Environmental Taxes and Industrial Waste in Countries across Europe

Abstract

The use of economic instruments within environmental policy has become a challenging topic for policymakers, governments and scholars. Environmental taxes have emerged as a prevailing preference in developed countries to promote sustainability. Recently, a particular focus has been given to waste generation and disposal, shifting the attention from greenhouse gases to another important source of environmental pollution. This paper investigates the effect of national environmental taxes and policies on industrial waste. A fixed effects model is used for 34 countries across Europe from 2004 to 2022. The results suggest that environmental taxes and energy policies reduce industrial (hazardous and non-hazardous) waste. However, environmental tax reforms should take into consideration the deterioration in environmental quality, the increase in economic costs and undesirable social consequences.