Environmental taxes have been widely employed as a critical instrument to drive the energy transition towards sustainability by internalizing the cost of environmentally harmful activities. However, given the arrival of refugees – a new population segment that is vulnerable in terms of both socio-economic and political aspects and characterized by the high popularity of traditional natural-based resources – the effectiveness of environmental taxes in promoting energy transitions remains ambiguous. This research examines the impacts of environmental taxes and refugee arrivals on the energy transitions as well as the moderating role of refugee arrivals on the environmental taxes-energy transition nexus.
Applying an advanced panel quantile regression to a sample of 31 OECD nations between 2000 and 2019 reveals the heterogeneous impacts of these two factors across different levels of the energy transition index.
Although environmental taxes foster the energy transition in most OECD nations, they hinder the progress in countries relying on polluting sources the most. Additionally, this paper presents the first, which finds a negative association between refugees and the energy transition. Notably, the dampening effect of refugee arrivals on the effectiveness of environmental taxes is found in countries with a more sustainable energy mix. However, in the early energy transition progress, refugees magnify the beneficial effect of environmental taxes on the energy transition.
This study offers both theoretical and empirical insights into the interrelationships among environmental taxes, refugee arrivals and energy transitions, providing valuable knowledge to the discourse on sustainable policy integration.
