Implication of Electricity Taxes and levies on Sustainable Development Goals in the European Union

Karimu, Amin and Swain, Ranjula Bali (2023) Implication of Electricity Taxes and levies on Sustainable Development Goals in the European Union. Energy Policy, 177. p. 113553. ISSN 0301-4215

Implication of electricity taxes and lev.pdf - Accepted Version
Available under License Creative Commons Attribution.

Download (830kB)


The current high electricity prices in the European Union (EU) are in part due to the high electricity taxes. United Nations’ Sustainable Development Goals (SDGs) Agenda with its global vision of attaining sustainable development especially seeks “to ensure universal access to affordable, reliable and modern energy services” (SDG 7). We investigate the synergy and trade-off effects of electricity taxes on sustainable development goals (SDGs) for the EU. Using panel data and panel vector autoregressive estimation approach, we find that higher household electricity taxes reduce both carbon emission and unemployment. Higher levels of industry electricity taxes, increase responsible production and consumption (SDG12) and reduces unemployment (SDG8). Furthermore, there is evidence for a strong synergy effect between electricity taxes, unemployment and carbon emission but a trade-off between tax and SDG9 (innovation and sustainable infrastructure). The taxes contribute more to the future variation of unemployment and responsible production and consumption in the EU, but these contributions are much larger for the industry as compared to the household sector. Our results confirm the double-dividend hypothesis, which implies that the policymakers can achieve environmental goals with higher electricity taxes, especially on household electricity. In the industrial sector, our findings suggest that there is a need for tax reform, to encourage innovation and adopt production processes that are less polluting to the environment.

Item Type: Article
Identification Number:
18 March 2023Accepted
12 April 2023Published Online
Uncontrolled Keywords: Electricity, EU, Household, Industry, Tax, Sustainable development goals
Subjects: CAH15 - social sciences > CAH15-02 - economics > CAH15-02-01 - economics
Divisions: Faculty of Business, Law and Social Sciences > Birmingham City Business School > Centre for Accountancy Finance and Economics
Depositing User: Amin Karimu
Date Deposited: 15 Feb 2024 12:25
Last Modified: 15 Feb 2024 12:25

Actions (login required)

View Item View Item


In this section...