Transport Infrastructure Investment, Transport Tax, Institutional Quality, and Transport-Based CO2 Emissions: Is an Environmentally Sustainable Transport Policy Followed in the Selected EU Countries?

Tiwari A. K., Aydin M., Degirmenci T., Sofuoğlu E., Ozcelik A.

Sustainable Development, 2025 (SSCI) identifier

  • Publication Type: Article / Article
  • Publication Date: 2025
  • Doi Number: 10.1002/sd.70083
  • Journal Name: Sustainable Development
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, IBZ Online, International Bibliography of Social Sciences, PASCAL, ABI/INFORM, Agricultural & Environmental Science Database, Aqualine, Aquatic Science & Fisheries Abstracts (ASFA), Business Source Elite, Business Source Premier, CAB Abstracts, Environment Index, Geobase, Greenfile, Index Islamicus, PAIS International, Political Science Complete, Pollution Abstracts, Sociological abstracts, Veterinary Science Database, Worldwide Political Science Abstracts, Civil Engineering Abstracts
  • Keywords: institutional quality, transport infrastructure investment, transport tax, transport-based CO2 emissions
  • Open Archive Collection: Article
  • Azerbaijan State University of Economics (UNEC) Affiliated: Yes

Abstract

This study examines the relationship between transport infrastructure investment, transport tax, institutional quality, and transport-based CO2 emissions in nine selected European countries (Austria, Belgium, Finland, France, Germany, Hungary, Slovakia, Spain, and Sweden). In this regard, the study employs the cointegration tests and Common Correlated Effects Mean Group (CCEMG) and Augmented Mean Group (AMG) long-run estimators from 1995 to 2020. The cointegration test captures a long-term relationship between transport infrastructure investment, transport tax, institutional quality, and transport-based CO2 emissions. Furthermore, AMG long-run test results reveal several empirical findings: (i) While transport infrastructure investment increases transport-based CO2 emissions in Germany and Hungary, it has a reducing effect in Austria. (ii) Transport tax increases transport-based CO2 emissions in Spain. However, it has a reducing effect in Slovakia and Sweden. (iii) Institutional quality increases transport-based CO2 emissions in Austria, while it has a reducing effect in Slovakia. For a robustness check, the CCEMG long-run estimator validates the AMG results. In the context of the findings, we recommend that policymakers implement long-term transportation strategies through transport taxes and institutional quality.