Green Taxation and Economic Competitiveness: A Cross-Country Comparative Analysis of Environmental Policy Impacts on Industrial Growth and Trade Performance

Abstract

The research aims to find out how environmental tax measures have influenced the growth of industries and the export performance of these 20 nations for the period of 2010 to 2024. Because the climate crisis is getting worse, using taxes on environmentally harmful activities has become an important way to support sustainability. Many argue about how it affects measures of economic success and trade in the marketplace. By using a cross-country, quantitative comparison, the research relies on panel data from the World Bank, OECD and IMF to study percentages of green income, rates of industrial development and rates at which export numbers rise. By using correlation, average comparison and regional division, statisticians studied how different components are connected in the structure. It is evident from the data that there is a slight negative link between the industrial sector and income from green taxes (r = −0.175), so higher environmental taxation tends to reduce industrial growth. Green taxes tend to increase trade growth slightly (r = 0.112). Western Europe lands in first position for green tax intensity, while Eastern Europe and Asia-Pacific both have rapid industrial growth rates but lower average green taxes. It is found that the scheme of green taxation, its use in the relevant context and how revenues are handled influence competitiveness to a major degree. The findings suggest that policies should consider both the environment and the economy and future studies with detailed business and industrial data could provide even more understanding.

Carbon Taxation, Environmental Policy, Green Fiscal Reform, Green Tax Revenue, Sustainable Development, Trade Policy