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Sustainability 2017, 9(11), 1986; doi:10.3390/su9111986

Environmental Tax Policy in Romania in the Context of the EU: Double Dividend Theory

Faculty of Economics and Law, University of Pitesti, Bd. Republicii, No. 71, Pitesti, 110062 Arges, Romania
Faculty of Economics, Doctoral School, University “Valahia” of Targoviste, Str. Aleea Sinaia, No. 13, Targoviste, 130004 Dambovita, Romania
Faculty of Theoretical and Applied Economics, Academy of Economic Studies, Calea Dorobanti, No. 15-17, sector 1, 010552 Bucuresti, Romania
Author to whom correspondence should be addressed.
Received: 21 September 2017 / Revised: 21 October 2017 / Accepted: 24 October 2017 / Published: 31 October 2017
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In the last decade, environment protection gained much more significance in designing the economic policies in the European Union (EU) countries. There are many economic and policy differences between the European countries, despite of the harmonization process inside the EU area. The path of implementation of the environmental tax reforms in the EU countries differs greatly from one country to another and the effects of such taxation in the economic and environmental areas are manifold. The authors of this paper have agreed to undertake the task of testing the double dividend hypothesis of the environmental taxation in Romania (an energy-intensive country) versus the EU area as a whole, using Vector Error Correction Model (VECM) techniques and Ordinary Least Squares (OLS) estimations. Our findings show that this hypothesis is validated neither in Romania (in the economic growth area) nor in the EU area as a whole (in the unemployment area). Therefore, Romania cannot increase the level of the environmental tax for supporting economic growth, but it can grant environmental subsidies for decreasing the emissions and supporting the economic growth. This could be achieved by expanding the tax labor base and by collecting higher budgetary revenues to sustain such environmental subsidies. As far as the EU area is concerned, it is a necessary measure to continue the descending trend for the labor taxation to achieve the goal of improving the employment rate. View Full-Text
Keywords: environmental taxes; Growth Domestic Product (GDP) growth; unemployment; greenhouse CO2 emissions; Romania; EU area environmental taxes; Growth Domestic Product (GDP) growth; unemployment; greenhouse CO2 emissions; Romania; EU area
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Radulescu, M.; Sinisi, C.I.; Popescu, C.; Iacob, S.E.; Popescu, L. Environmental Tax Policy in Romania in the Context of the EU: Double Dividend Theory. Sustainability 2017, 9, 1986.

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