Carbon Dioxide Discharges and Taxes: Analysis of the Influence of GNI Per Capita, Human Development Index, and Industrialization Level

Abstract

This research aims to determine the fundamental link between development strategies, environmental sustainability, and economic growth, particularly examining the global impact of CO2 emissions and the influence of industrial and tax laws on the environment and economy. Using W statistics and Zbar-stat, the study determines the causal relationships among variables, employing a dynamic threshold panel data model to evaluate threshold impacts. Data from 1999 to 2022 were collected from 40 countries, categorized into developed and developing nations by the World Bank. The Dumitrescu-Hurlin Panel Causality Test and Pesaran's CD test reveal a global relationship among policy, environment, and economy, with changes in CO2 emissions and GNI per capita influencing international environmental and economic policies. Investment in human development shows a bidirectional relationship with CO2 emissions, industrialization, and taxes. Dynamic threshold panel data models indicate varying impacts of human development investments on CO2 emissions depending on their level, highlighting the need for threshold considerations in policy-making. This study offers new insights into the interplay between development strategies and environmental sustainability, contributing significantly to environmental economics and assisting policymakers in crafting more effective and sustainable programs.