Investigating the role of green transport, environmental taxes and expenditures in mitigating the transport CO2 emissions

Abstract

Transportation sector is considered a major contributor to the release of the carbon emissions in the atmosphere. The present research explores the effect of traffic, environmental taxes and expenditures on transport-related carbon emissions. We apply a cross-sectional autoregressive distributed lags estimator for short- and long-run estimates by using panel data for 35 OECD countries. We demonstrate traffic increase transport-related carbon emissions by 14.65% on average. Transport-related carbon emissions will rise by 1.5% over the near term as a result of the combined effect rail and road-vehicles, and energy consumption. Environmental expenditures and green transportation, on the other hand, will cut transportation emissions by 21.7% and 45.20% in the short and long runs, respectively. Furthermore, the findings reveal an inverted u-shaped link between transportation-related carbon emissions and consumption. Based on real-world evidence, this study advises that some countries reduce traffic while simultaneously increasing spending on the development of environmentally friendly transportation options.