Authors: Panagiotis Fotis

Title: The impact of tax policy on energy demand: A European analysis

Abstract

Environmental protection is one of Europe's key values. The European Union has favoured market-based instruments, among which fiscal instruments, to tackle the climate change issue. This paper establishes panel data analysis to analyze the effect of tax policy on energy consumption and CO₂ emission in European Union. For this purpose we use Mean Group estimators (Mean Group estimator; Common Correlated Effects Mean Group estimator; Augmented Mean Group estimator) and GMM estimators (Arrelano Bond; Arrelano/Bover/Blundell-Bond) to estimate the effect of taxation on energy consumption and pollution within the European Union the last two decades.