Does environmental tax matter for environmental degradation in the Netherlands? Evidence from novel Fourier-based estimators.

This paper aims to capture the effect of an environmental tax on environmental degradation in the Netherlands while controlling economic growth, primary energy consumption, and trade in the Netherlands. As part of its climate change plan, the Netherlands government aims to reduce greenhouse gas emissions to industrial levels by 2030 and reach net-zero emissions by 2050. The present study used novel Fourier ADL cointegration, Fourier ARDL, and Fourier TY causality approaches. The outcomes of this study reveal that environmentally related taxes cause the mitigation of environmental degradation in the Netherlands, while primary energy consumption affects environmental sustainability negatively. This study provides policy implications based on the empirical results of this study, which support the Sustainable Development Goals (SDG) of 2030 through (SDG 7) affordable and sustainable energy, (SDG 9) innovation, and (SDG 13) environmental sustainability.