Environmental Taxation in Climate Policy Design: An Empirical Assessment of Policy Effectiveness

Abstract Book of the 11th International Conference on Applied Research in Management, Business and Economics

Year: 2026

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Environmental Taxation in Climate Policy Design: An Empirical Assessment of Policy Effectiveness

Prof. Ana Paula Rocha, Ana Arromba Dinis

ABSTRACT:

The effectiveness of public policies aimed at mitigating climate change is contingent upon the capacity of environmental fiscal instruments to engender quantifiable adaptations in economic behavior and environmental outcomes. The present study analyses environmental taxation as a public policy instrument, evaluating its effectiveness in internalizing externalities, reducing greenhouse gas emissions, and encouraging the shift towards a low-carbon economy. The analysis focuses on the design, implementation, and evaluation of environmental taxes and incentives, considering the criteria of environmental effectiveness, economic efficiency, and social equity. The present study adopts an empirical approach, based on the collection and analysis of primary data obtained from companies through the administration of structured questionnaires. The questionnaires are designed to assess levels of environmental tax literacy, perceptions of green tax instruments, and strategic responses to existing policies. The text goes on to consider the institutional and informational challenges that affect the effectiveness of these instruments, such as regulatory complexity and administrative capacity limitations. The paper also examines policy monitoring and evaluation mechanisms and emphasizes the importance of consistency with other climate and economic policy instruments, as well as revenue recovery. From a public policy perspective, some guidelines are proposed to enhance the effectiveness of environmental fiscal instruments. These guidelines are based on empirical evidence and will contribute to the design of more effective and informed climate policies.

Keywords: Evidence-Based; Policymaking; Fiscal Governance; Policy Impact Assessment; Green Taxation; Corporate Tax Compliance