Do transportation taxes promote pro-environmental behaviour? An empirical investigation

The transportation sector is a crucial driver of energy intensity and environmental degradation. Therefore, we aim to explore the nexus of transportation taxes, energy intensity, and CO2 emissions for the BICS economies. The econometric approaches, CS-ARDL and PMG-ARDL, have been employed to compute the estimates. The long-run estimates of the green transportation tax variable are negatively significant in both energy intensity and CO2 emissions models irrespective of the estimation technique. These findings imply that green transportation taxes help reduce energy intensity and CO2 emissions in BICS economies. Conversely, in the short-run, the effects of transportation taxes on energy intensity and CO2 emissions are mixed and inconclusive. Hence, transportation taxes are necessary to keep the polluters under control not only from the transport sector but also serve as a deterrent for other sectors as well.