ABSTRACT

Environmental taxes play a crucial role in minimizing environmental degradation, conserving natural resources, and creating a healthier and more livable environment. In addition to the environmental benefits that can be achieved through environmental taxes, the idea that they can also help combat another significant issue—unemployment—has gained increasing importance. This situation, known as the “double dividend hypothesis,” explains that taxes on labor and capital negatively affect employment, while the revenue from environmental taxes can be used to reduce the tax burden on these production factors, resulting in an employment-boosting effect. In this context, the study focuses on the role of environmental taxes in sustainable development and the policies and goals set in this regard. In the study, where environmental taxes are evaluated within the framework of the double dividend hypothesis, the impact of environmental taxes on employment is analyzed using panel time series. The empirical analysis, employing panel cointegration and panel VAR models, shows that environmental taxes have a significant and positive effect on employment. Therefore, it can be concluded that the double dividend hypothesis holds true for the period and countries under review.