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Taha Zaghdoudi and Samir Maktouf
 
''Threshold effect in the relationship between environmental taxes and CO2 emissions: A PSTR specification''
( 2017, Vol. 37 No.3 )
 
 
This paper examines the relationship between environmental taxes and CO2 emissions for the OECD countries over the period 1994-2014, within the framework of the environmental Kuznets curve (EKC). By performing Panel Smooth Threshold Regression (PSTR) model, we found that the nexus between environmental taxes and CO2 emissions is non-linear. Besides, results show that there exists a statistically positive relationship between environmental taxes and CO2 emissions above the threshold level of 2.67\%, above which environmental taxes starts increasing CO2 emissions in OECD countries. Findings indicate also that there is a quadratic relationship between CO2 emissions and economic growth, confirming the existence of an Environmental Kuznets Curve (EKC) for OECD countries. This paper supports the view that a properly-implemented environmental taxes would result in the reduction of CO2 emissions in OECD countries.
 
 
Keywords: CO2 emissions, Environmental taxes, Renewable energy, Panel smooth transition regression
JEL: Q4 - Energy: General
Q5 - Environmental Economics: General
 
Manuscript Received : Aug 27 2017 Manuscript Accepted : Sep 27 2017

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