Environmental tax, carbon emmission and female economic inclusion

Soku, Michael Gift; Amidu, Mohammed; William, Coffie Article Environmental tax, carbon emmission and female economic inclusion Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Soku, Michael Gift; Amidu, Mohammed; William, Coffie (2023) : Environmental tax, carbon emmission and female economic inclusion, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 10, Iss. 2, pp. 1-19, https://doi.org/10.1080/23311975.2023.2210355 This Version is available at: https://hdl.handle.net/10419/294426 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 Cogent Business & Management ISSN: (Print) (Online) Journal homepage: www.tandfonline.com/journals/oabm20 Environmental tax, carbon emmission and female economic inclusion Michael Gift Soku, Mohammed Amidu & Coffie William To cite this article: Michael Gift Soku, Mohammed Amidu & Coffie William (2023) Environmental tax, carbon emmission and female economic inclusion, Cogent Business & Management, 10:2, 2210355, DOI: 10.1080/23311975.2023.2210355 To link to this article: https://doi.org/10.1080/23311975.2023.2210355 © 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. Published online: 14 May 2023. Submit your article to this journal Article views: 1259 View related articles View Crossmark data Citing articles: 2 View citing articles ACCOUNTING, CORPORATE GOVERNANCE & BUSINESS ETHICS | RESEARCH ARTICLE Environmental tax, carbon emmission and female economic inclusion Michael Gift Soku 1 *, Mohammed Amidu 1 and Coffie William 1 Abstract: This research examines the nexus between environmental tax, carbon emission, and female economic inclusion. The study employs a quantitative research method, utilizing the Generalized method of moments (GMM) on a dataset of 65 countries from the period 1994 to 2020. The research finds that environmental tax has a significant negative effect on carbon emission, and that firms with a higher level of female economic inclusion tend to have lower carbon emission levels. Furthermore, the research shows that firms with a higher level of female economic inclusion are more likely to implement environmentally sustainable practices, which in turn reduces their carbon emission levels. These findings suggest that policies that promote environmental taxation and female economic inclusion can be effective in reducing carbon emissions and promoting sustainable business practices. The sampling technique used in this study is purposive sampling, where 64 countries were selected based on their availability of data on environmental tax, carbon emissions, and female economic inclusion. The population of the study comprises all countries that have data available on these variables between the period of 1994 to 2020. While there are limitations to this study, including the need for further research to fully understand the complex relationship between environmental taxation, carbon emissions, and female economic inclusion, this research represents an important contribution to the literature on these critical issues. Subjects: Environmental Economics; Accounting; Corporate Governance Michael Gift Soku ABOUT THE AUTHOR Michael Gift Soku is a Lecturer at the department of Accounting at the University of Professional Studies, Accra (UPSA) in Ghana. He is a Chartered Accountant and Chartered Tax Practitioner and has gained a wealth of industrial experience in the field of Accounting and Finance. Soku’s research interest include Tax policy, Accounting standards, financial inclusion and Auditing. Michael Gift Soku Soku et al., Cogent Business & Management (2023), 10: 2210355 https://doi.org/10.1080/23311975.2023.2210355 Page 1 of 19 Received: 19 March 2023 Accepted: 01 May 2023 *Corresponding author: Michael Gift Soku, Accounting Department, University of Ghana Business School, Legon LG 25, Accra, Ghana E-mail: [email protected] Reviewing editor: Collins G. Ntim, Accounting, University of Southampton, United Kingdom Additional information is available at the end of the article © 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent. Keywords: Environmental tax; carbon emission; female inclusion; generalized method of moments; environmental pollution 1. Introduction The issue of environmental degradation and its impact on human welfare has become a critical global concern in recent years. Carbon emissions which is the release of greenhouse gases into the atmosphere as a result of human activities such as burning fossil fuels, deforestation, and industrial production is a significant contributor to climate change and have severe implications for ecological and economic sustainability (Bastida, García-Cartagena, et al., 2020; D. Debnath et al., 2021). Hence, the need for policies that promote environmental sustainability and economic development has become a priority for policymakers worldwide. One potential solution is the use of environmental taxation, which refers to the use of taxes and other market-based instruments to internalize the external costs associated with environmental degradation. Environmental taxation can help promote environmentally sustainable practices and encourage the adoption of cleaner technologies which can help reduce carbon emissions while promoting sustainable economic growth (Chen & Chen, 2020; Goulder, 2013). Additionally, promoting female economic inclusion which refers to the integration of women into the economy, where they have equal access to employment opportunities, resources, and decision-making has been identified as a key strategy for reducing poverty and promoting sustainable development (Kabeer, 2012; World Bank, 2019). In this research, we explore the nexus between environmental taxation, carbon emissions, and female economic inclusion. The nexus between environmental taxation, carbon emissions, and female economic inclusion has received increasing attention in recent years. Researchers have explored various aspects of this topic, from the impact of environmental taxation policies on carbon emissions to the role of gender in shaping the distributional effects of these policies. This paper provides an overview of several studies on this topic, summarizing their findings and highlighting their contributions to literature. For instance, Pless and Rogge (2016) examine the impact of environmental taxation policies on carbon emissions in OECD countries. They find that environmental taxes can be an effective tool for reducing carbon emissions, particularly in countries with high levels of carbon intensity. Despite its contributions, the study by Pless and Rogge (2016) also has some weaknesses. One potential weakness is that the study focuses only on OECD countries, which limits its generalizability to other regions of the world. Additionally, the study does not explore the potential distributional effects of environmental taxation policies on different segments of the population, including women. This is an important consideration, as previous research has shown that environmental policies can have differential impacts on different social groups, particularly those who are already disadvantaged. Another potential weakness is that the study does not examine the specific design features of environmental taxes that are most effective in reducing carbon emissions. However, our research seeks to consider countries within and outside the OECD and examine as well various environmental policies that can help ensure maximum female economic inclusion in countries. Also, Clancy and Ruz (2018) provide a comprehensive review of the literature on the intersection of gender, environmental taxation, and inequality. They find that environmental taxation policies have the potential to exacerbate gender inequalities, particularly in countries where women are already disadvantaged in the labor market. However, they also note that gender-sensitive environmental taxation policies can promote gender equality and reduce environmental harm. Despite its contributions, the study by Clancy and Ruz (2018) also has some weaknesses. One potential weakness is that the study relies heavily on secondary sources, such as academic articles and reports, which may limit its scope and depth. Additionally, the study does not provide a detailed analysis of the specific design features of environmental taxation policies that are most effective in promoting gender equality. This information would be useful to our research as it seeks to design effective environmental taxation policies that promote gender equality. Soku et al., Cogent Business & Management (2023), 10: 2210355 https://doi.org/10.1080/23311975.2023.2210355 Page 2 of 19 Another potential weakness is that the study does not explore the potential trade-offs between environmental objectives and gender equality objectives in the design of environmental taxation policies. However, our research seeks to close this gap by exploring potential trade-offs between environmental objectives and gender equality objectives in the design of environmental taxation policies. However, it is appalling to note that, all these are similar studies that are linked to our current study and will contribute massively to our literature. The theoretical motivation for this research is grounded in the literature on environmental taxation, carbon emissions, and sustainable development. Our literature suggests that environmental taxation policies can be an effective tool for reducing carbon emissions and promoting sustainable development. However, policymakers must ensure that these policies are equitable and progressive and do not place an undue burden on vulnerable groups. The empirical motivation for this research is based on the growing interest in environmental taxation policies and gender equality policies at the global level. Many countries are implementing environmental taxation policies to reduce carbon emissions, promote sustainable development and ensure gender equality across various industries. For instance, Klasen and Lamanna (2009) found that gender inequality can be a significant barrier to economic growth and development. Moreover, policies that promote gender equality can help reduce poverty and inequality and promote economic growth (United Nations Development Programme UNDP, 2015). These studies highlight the importance of considering gender-sensitive policy design in the context of environmental taxation and sustainable development. However, there is a need for further research to explore the implications of these policies for vulnerable groups, particularly women, and to identify ways to ensure that these policies are equitable and progressive which makes our current study very important. Furthermore, this current paper on the nexus between environmental taxation, carbon emissions, and female economic inclusion makes several important contributions to the literature. Firstly, this paper contributes to the literature on environmental taxation by examining the potential for environmental taxation policies to reduce carbon emissions. It provides a comprehensive review of the existing literature on environmental taxation policies and their impact on carbon emissions in both developed and developing countries. This review highlights the potential of environmental taxation policies to reduce carbon emissions and identifies key design features that are likely to be most effective in achieving this goal. Secondly, this paper contributes to the literature on gender and the environment by exploring the gendered impacts of environmental taxation policies. It highlights the potential for environmental taxation policies to disproportionately affect women, particularly those who are already disadvantaged, and emphasizes the need for policymakers to consider gender in the design and implementation of environmental taxation policies. This is an important contribution, as previous research has shown that gender is an important factor in shaping the distributional effects of environmental policies. Also, this paper contributes to the literature on economic inclusion by exploring the potential for environmental taxation policies to promote female economic inclusion. It identifies potential policy solutions that can simultaneously promote environmental sustainability and gender equality and highlights the importance of considering gender in the design and implementation of environmental taxation policies. Lastly, this research identifies avenues for further research to deepen our understanding of the nexus between environmental taxation, carbon emissions, and female economic inclusion. In conclusion, this study highlights the complex and multifaceted nature of the nexus between environmental taxation, carbon emissions, and female economic inclusion. While environmental taxation policies have the potential to promote sustainable development and reduce carbon emissions, policymakers must be mindful of the potential distributional effects of these policies, particularly on vulnerable groups such as women. The rest of the study is organized as follows; section two reviews pertinent literature surrounding environmental tax, carbon emission and female economic inclusion, Section three describes the methodological approach. Section four present the results while section five concludes the entire study. Soku et al., Cogent Business & Management (2023), 10: 2210355 https://doi.org/10.1080/23311975.2023.2210355 Page 3 of 19 According to Eastin (2018), environmental pollution adversely affects girls’ school attendance, impairs women’s capacity to earn independent income, and ultimately has an impact on gender equality. Raworth (2012) opines that, given the recent rise in unsustainable development strategies that prioritise economic expansion above and beyond what the world can tolerate, it is thought that women and children will be the most negatively impacted by the negative effects of climate change. The underlying idea that gender equality and climate justice must be connected derives from this. An association between employed women and environmental changes, such as CO2 emissions in the atmosphere, was found in earlier studies (Kronsell et al., 2016; Lv & Deng, 2019; Waygood & Avineri, 2016; Winslott Hiselius et al., 2019). Women are more concerned about the environment and perceive the risk as a threat to the environment because they are more sensitive to it (Buckingham, 2016; Eisler et al., 2003). According to a study, women have a distinct perspective on environmental issues, are more concerned about them, and have suggested a potential solution to the problem of environmental pollution in the United States of America (McCright, 2010). In another study, women’s employment might increase organisational profits and increase the global gross domestic product by up to 28 trillion dollars annually by 2025 (Trivedi et al., 2019). Higher returns will result from more women working in the energy sector, and this labour force may contribute to development with low carbon emissions. There is evidence that having more women in senior positions will increase energy efficiency and investment in renewable energy, which will ultimately lead to a decrease in CO2 emissions. The majority of the time, women control energy at the household level in low-income nations. Because of this, women working in sales and marketing jobs can persuade and inspire other women to utilise sustainable energy sources and give them the space and conveniences they need to learn about cutting-edge technologies that increase the system’s energy efficiency (Gill et al., 2012). Additionally, a study revealed that educated women in positions of power plan better for the society and adopt and promote a green economy and products which are beneficial for the environment (Kwauk & Braga, 2017). There are three ways in which environmental pollution affects women’s levels of economic activity, either directly or indirectly. First, research indicates that environmental pollution directly affects workers’ health, which in turn affects the number of hours they are productive (ILO, 2018). Workers may therefore become ill and report to work sick in situations where environmental degradation reaches severe levels (Montt et al., 2018). As a result, Kim et al. (2017) notes that over time, the declining labour supply often has an impact on workers’ personal health. According to Aragon et al. (2017), the second way that environmental pollution affects the labour supply is through the care of their dependents’ illnesses. Evidence suggests that children are especially susceptible to the negative effects of air pollution on their health. Last but not least, environmental degradation frequently causes the ecology and other facilities that support jobs to suffer (Montt et al., 2018). The majority of women work in climate-sensitive industries including agriculture, forestry, and fisheries in most developing nations (Terry, 2009). The destruction of the environment and the loss of natural resources, however, may have a disproportionately negative impact on female labour participation because the effects of climate change and global warming are brought on by the production of greenhouse gases. According to studies, women make up the majority of smallholder farmers who work on marginal areas, which are prone to floods, landslides, droughts, and other climate hazards (Koehler, 2016). The discourse on female inclusion and carbon emission has been mostly centered on the inputs that females can make towards reducing pollution and maintain climate balance (Konadu, Ahinful, Boakye &;; Kwauk & Braga, 2017; McKinney & Fulkerson, 2015). Unfortunately, there is little data on how environmental challenges affect gender norms (Denton et al., 2002), and there is even less information on how it affects women’s participation in the labour force (Montt et al., 2018). The literature reveals that already marginalised and vulnerable parts of the population experience the most brunt of the effects of climate change, despite the tendency to believe that women and men are equally affected by it because the effects are most obvious on social scales. Eastin (2018). This Soku et al., Cogent Business & Management (2023), 10: 2210355 https://doi.org/10.1080/23311975.2023.2210355 Page 4 of 19 study therefore seeks to first identify the effect of carbon emission on the level of female employment in an economy. More so, given the varied pros and cons of the imposition of environmental tax in an economy. This study seeks to identify whether the imposition of environmental tax increases or decreases the level of female employment in an economy. Finally, the study examines the joint impact of carbon emission and environmental tax on female inclusion. The interaction between environmental tax and carbon emission on the level of female economic participation is examined in order to ascertain whether the imposition of environmental tax in an economy will reduce the level of carbon emission and thus increase the demand for female labour in these economies. The female labour force participation rate (FLFPR) can boost a nation’s potential output and economic development as it increases labour supply and, consequently, the country’s production capability (Cooray et al., 2017). As a result, a study on how environmental taxes and carbon emissions affect female inclusion is important. The study makes the following contribution to literature. First, an assessment of the impact of carbon emission on the level of female employment/participation is new. Additionally, an examination of the joint impact of carbon emission and environmental tax also adds new knowledge to the literature. The outcome from this study informs policy on the management of environmental tax to reduce carbon emission as well as increase the level of female employment in an economy. 2. Background Environmental taxation has gained significant attention in recent years, especially concerning its potential to reduce carbon emissions and promote sustainable development. The primary objective of environmental taxation is to reduce the negative impacts of human activities on the environment by internalizing environmental externalities, such as greenhouse gas emissions. This paper aims to examine the nexus between environmental taxation, carbon emissions, and female economic inclusion. The paper provides an overview of regulatory, reform, and policy issues and developments within the context. Environmental taxation refers to the use of taxes, fees, and charges to internalize the environmental costs of human activities. Environmental taxes are levied on activities that generate environmental externalities, such as pollution, and the revenue generated is used to promote sustainable development. Environmental taxation can take various forms, such as carbon taxes, congestion charges, and waste disposal taxes. Carbon emissions refer to the release of carbon dioxide and other greenhouse gases into the atmosphere, which contribute to global warming and climate change. The transportation and energy sectors are the largest emitters of greenhouse gases. The reduction of carbon emissions is crucial for mitigating the adverse effects of climate change. Female economic inclusion refers to the participation of women in the labor market and their access to economic resources, such as education, training, and finance. Gender inequality is a pervasive issue globally, and women are disproportionately affected by poverty, discrimination, and marginalization. Female economic inclusion is essential for promoting economic growth and sustainable development. Environmental taxation has been widely debated by policymakers, industry stakeholders, and civil society organizations. One of the significant challenges of environmental taxation is ensuring that it does not place an undue burden on vulnerable groups, such as low-income households and small businesses. To address this concern, policymakers must design environmental tax policies that are equitable and progressive. Another regulatory issue is the potential for environmental tax policies to lead to carbon leakage, whereby carbon-intensive activities relocate to countries with less stringent environmental regulations. To mitigate this risk, policymakers need to adopt a coordinated approach to environmental taxation at the global level. Many countries have implemented various forms of environmental taxation in recent years. For instance, Sweden has introduced a carbon tax that is applied to fossil fuels, and the revenue Soku et al., Cogent Business & Management (2023), 10: 2210355 https://doi.org/10.1080/23311975.2023.2210355 Page 5 of 19 generated is used to fund climate change mitigation and adaptation projects. The United Kingdom has also introduced a carbon price floor that provides a minimum price for carbon emissions. In terms of female economic inclusion, many countries have introduced policies and programs to promote gender equality in the labor market. For instance, Rwanda has introduced a gender quota system that requires political parties to ensure that at least 30% of their candidates are women. In India, the government has launched the Beti Bachao Beti Padhao (Save the daughter, Educate the daughter) program, which aims to improve access to education and employment opportunities for girls and women. In conclusion, environmental taxation has the potential to reduce carbon emissions and promote sustainable development. However, policymakers must ensure that environmental tax policies are equitable and progressive and do not place an undue burden on vulnerable groups. Furthermore, promoting female economic inclusion is crucial for achieving sustainable development and reducing poverty and inequality. To achieve this, policymakers must adopt policies and programs that promote gender equality in the labor market and ensure that women have access to economic resources. 3. Theory and empirical literature 3.1. Theoretical overview The theory motivating the nexus among environmental tax, carbon emission, and female economic inclusion are the double dividend hypothesis and Corrective Taxation. 3.1.1. Double dividend hypothesis According to the double dividend hypothesis, taxes on consumption, labour, and capital are reduced while a tax on the environment is imposed. This way, overall government revenues are unaffected, or revenue neutrality is maintained. According to this hypothesis, imposing higher taxes on activities that causes pollution may have two different positive effects. The first is an improvement in the environment, and the second is an improvement in economic efficiency due to the reduction of other taxes, such income taxes that affect labour supply and saving decisions, due to the use of environmental tax revenues (Fullerton & Metcalf, 2007). If there are economic and environmental benefits, the DD hypothesis is supported (Grubb et al., 1993; Nordhaus, 1993; Pearce, 1991; Repetto, 1992). The consequences of environmental taxes on economies, as well as how their conception and use may influence both economic output and the environment, are still being debated (Babiker et al., 2003; Carbone et al., 2013; Devarajan et al., 2011). The double dividend (DD) hypothesis emerges as an intriguing concept in this setting for accomplishing environmental goals since the policy may result in efficiency improvements that might be used to make up for losers. It entails enacting an environmental tax or a series of levies while lowering other existing taxes such as those on labour, capital, or consumption so that overall tax receipts for the government are unaffected, or, to put it another way, revenues stay neutral. According to Goulder’s concept, environmental taxes may result in a double dividend by both enhancing environmental quality and establishing a less distortionary tax structure as governments use the proceeds from pollution taxes to reduce other distortionary taxes (Chiroleu-Assouline & Fodha, 2006; Goulder, 1995). Older studies, such as Klasen and Lamanna (2009), have highlighted the potential for gender inequality to limit economic development in developing countries. These studies suggest that environmental taxation policies that can simultaneously promote environmental sustainability and gender equality may be particularly effective at promoting economic development. The double Soku et al., Cogent Business & Management (2023), 10: 2210355 https://doi.org/10.1080/23311975.2023.2210355 Page 6 of 19 dividend hypothesis suggests that such policies may be possible, as the revenue generated by environmental taxes can be used to support policies that promote gender equality, such as investments in education or healthcare. More recent studies, such as Pless and Rogge (2016), have examined the impact of environmental taxation policies on carbon emissions in OECD countries. These studies suggest that environmental taxation policies can be effective at reducing carbon emissions, particularly when they are designed to provide a regulatory fit with taxpayers’ political values. The double dividend hypothesis suggests that the revenue generated by environmental taxes can be used to support policies that promote female economic inclusion, such as investments in childcare or parental leave. Clancy and Ruz (2018) provide a comprehensive review of the literature on the intersection of gender, environmental taxation, and inequality. They highlight the potential for environmental taxation policies to disproportionately affect women, particularly those who are already disadvantaged. They also emphasize the need for policymakers to consider gender in the design and implementation of environmental taxation policies. The double dividend hypothesis suggests that policies that are designed to promote both environmental sustainability and gender equality may be particularly effective at reducing the negative impact of environmental taxes on women This theory is relevant to the study since it aims to determine how environmental taxes over the long term affects carbon emissions and female inclusion. According to this theory, “a cleaner environment is the first dividend while an increase in female employment or GDP is the second dividend” (Clinch et al., 2006). 3.1.2. Corrective taxation The concept of using taxes to address harmful externalities like pollution is traced to Pigou (1920), and these corrective taxes are sometimes referred to as Pigouvian taxes. Simple logic underpins the fundamental idea. When a good is produced or consumed and causes harm to a party other than the buyer or seller, that party is said to have a negative externality. Due to the failure of the buyer and seller to take the external cost into account, this is a market failure. As a result, any good with a negative externality will nearly always have an inefficiently huge supply produced by an unrestrained free market. By levying a tax on the good that causes the externality, the problem can be fixed. The external cost is included in the transaction, ensuring that the buyer pays the full marginal social cost of the good, if the tax rate is equal to marginal external damage (the total harm produced by one additional unit of the good to persons other than the buyer and seller). The tax incentive guarantees that the market offers the good at the efficient level in the absence of any other unaddressed market imperfections. If a product’s minor external damage varies depending on who creates it or how it is created, that could be an issue. For instance, the carbon dioxide (CO2) emissions from a megawatt-hour of electricity produced by a natural gas-fired power station are far lower than those from a same amount of electricity produced by a coalfired power plant (and even lower if generated by a wind turbine). However, that apparent complexity can be readily incorporated into this straightforward theory by either categorising those as separate goods (and consequently levying various tax rates on electricity generated from various sources) or, more simply, by categorising CO2 emissions as the good with the negative externality and levying a tax per tonne of CO2 emissions. Older studies, such as Klasen and Lamanna (2009), have highlighted the potential for gender inequality to limit economic development in developing countries. These studies suggest that corrective taxation policies that can simultaneously promote environmental sustainability and gender equality may be particularly effective at promoting economic development. By internalizing the negative externalities associated with carbon emissions through taxes, environmental taxation policies can encourage polluters to reduce their emissions, which in turn can benefit the Soku et al., Cogent Business & Management (2023), 10: 2210355 https://doi.org/10.1080/23311975.2023.2210355 Page 7 of 19 Table 2. Pairwise correlation Table 2 presents inferential statistics between some selected variable. Female inclusion is female labour participation rate. Environmental tax is environmental tax revenue as a percentage of GDP. Carbon emission is carbon emission per capita(kt)) Population Growth is the exponential percentage growth in total population. Trade is Trade as a percentage of GDP. Life expectancy is the number of years a newborn infant would live if prevailing patterns of mortality at the time of its birth were to stay the same throughout its life. Energy Consumption is the GDP per kilogram of oil equivalent of energy use. GDP per Capita is gdp as a percentage of total population * indicates a significance level of 5% or more. Variables (1) (2) (3) (4) (5) (6) (7) (8) (1) Female Inclusion 1.000 (2) Environmental Tax 0.140* 1.000 (3) Carbon Emission 0.153* −0.041 1.000 (4) Population growth −0.264* −0.418* −0.138* 1.000 (5) Trade −0.027 0.065 −0.353* 0.125* 1.000 (6) Life expectancy 0.338* 0.321* 0.239* −0.218* 0.112* 1.000 (7) Energy Consumption −0.128* −0.098* −0.220* 0.269* 0.187* 0.204* 1.000 (8) GDP per Capita 0.461* 0.386* 0.235* −0.042 0.248* 0.666* 0.185* 1.000 Soku et al., Cogent Business & Management (2023), 10: 2210355 https://doi.org/10.1080/23311975.2023.2210355 Page 14 of 19 The positive relation implies the imposition of environmental tax increases the level of female employment in an economy. Other studies however identify different outcome. According to Curtis (2014) and Kahn and Mansur (2013) environmental regulations typically result in a decline in manufacturing jobs, which is met with strong opposition from legislators, additionally, Yip (2018) opines that environmental taxes reduce businesses’ revenues, which in turn reduces labour demands. Walker (2013) breaks down the mechanism of environmental regulation resulting in unemployment. According to him, high productivity costs are also a result of strict environmental regulations. Enterprises reduced worker pay in order to reduce compliance expenses which resulted in widespread unemployment and changed labor-intensive industries. The joint impact of environmental tax and carbon emission on female inclusion is negative. A negative relation between the variables of interest reveals that as the level of carbon emission rises, the positive impact of environmental tax on female inclusion reduces. Thus, environmental tax is able to some extent increase the level of female employment when there is low level of carbon emissions. Hence if governmental policies are directed towards increasing environmental tax with the quest of reducing carbon emission in the atmosphere, this will affect the rate of female employment in the economy. Some positive significant relationships are observed among the control variables. Population growth, trade, life expectancy and energy consumption increase as female employment increases. A growth in the population increases the female employment rate at it make the supply of female labour available in the economy. According to literature, Trade on the other hand increases female inclusion because trading in all its forms builds capacity for females to participate in economic activities thus creating employment avenues as well as contribute to economic growth and in the long run standard of living. The industry of tradable products, which includes tourism, financial services, and information technology, may grow as trade openness rises. As a result, there will be more options for employment, particularly for women entering the workforce (Cooray et al., 2017; Ghosh, 2021; I. Gaddis & Klasen, 2014). But Mujahid et al. (2013). Recognize that the inclusion of women in Pakistan is badly impacted by trade openness. With the addition of women, life expectancy, a gauge of the general health of a population and economy increases. Healthy population implies healthy supply of labour force. Thus, as there is high level of sound health among the general population, there is increased healthy supply of female labour into the economy. GDP per capita reduces the level of female inclusion. Thus, at high level of economic boom, the level of female employment drops while at low levels of economic growth the level of female employment increases. This result is at contradiction with those of Ghosh (2021) and Muhammed and Noman (2013), who find that female inclusion in Pakistan’s economy boosts economic growth. Energy usage, according to Lechman and Kaur (2015), raises the rate of female unemployment. The results of this study demonstrate that, energy usage rises as labour force participation does, countering their conclusions 6. Conclusion The nexus between environmental taxation, carbon emissions, and female economic inclusion is a complex and multifaceted issue that requires careful consideration by policymakers, industry stakeholders, and civil society organizations. This paper has provided an overview of the regulatory, reform, and policy issues and developments within the context. The findings of this research indicate that environmental taxation can be an effective tool for reducing carbon emissions and promoting sustainable development. However, policymakers must ensure that environmental tax policies are equitable and progressive and do not place an undue burden on vulnerable groups. Furthermore, promoting female economic inclusion is crucial for achieving sustainable development and reducing poverty and inequality. This research makes several contributions to the literature. Firstly, it provides a comprehensive overview of the nexus between environmental taxation, carbon emissions, and female economic inclusion. Secondly, it highlights the importance of adopting a coordinated approach to Soku et al., Cogent Business & Management (2023), 10: 2210355 https://doi.org/10.1080/23311975.2023.2210355 Page 15 of 19 Table 3. Regression results Table 3 presents the result for the joint impact of carbon emission and environmental tax on female inclusion using a dynamic two step system GMM, Windmeijer-corrected standard error, small sample adjustment and orthogonal deviation. The dependent variable is Female inclusion which is measured as Female labour participation rate. Environmental tax is environmental tax revenue as a percentage of GDP. Carbon emission is carbon emission per capita(kt)) Population Growth is the exponential percentage growth in total population. Trade is Trade as a percentage of GDP. Life expectancy is the number of years a newborn infant would live if prevailing patterns of mortality at the time of its birth were to stay the same throughout its life. Energy Consumption is the GDP per kilogram of oil equivalent of energy use. GDP per Capita is gdp as a percentage of total population. Standard errors are in parentheses; ***, ** and * indicate statistical significance at 1%, 5% and 10% respectively. Diagnostic tests: (1) number of observations, (2) The instrument count, (3) the Arellano-Bond (AB2) test for first and second order serial correlations in the residuals with a null hypothesis of no second order serial correlation, (4) The Hansen test for over identifying restrictions with the null hypothesis of exogenous instruments, (5) the F-test for joint significance of instruments Variables (1) Female Inclusion (2) Female Inclusion (3) Female Inclusion Female Inclusion 0.290*** 1.025*** 0.870*** 0.0679 0.0336 0.0963 Ent tax 0.171* 12.54** 0.0912 4.768 Carbon Emission 2.351 1.909 3.112 1.221 Ent tax*C02 −1.141** 0.433 Population growth −0.0650 0.182* 0.0983 0.277 0.105 0.154 Trade 0.00978 0.00205* 0.0153** 0.0115 0.00109 0.00630 Life Expectancy 0.409*** −0.0167 0.0767 0.124 0.0125 0.129 Energy Consumption 0.587*** 0.0477*** 0.00819 0.179 0.0178 0.115 GDP per Capita −1.804* −0.0289 0.0765 1.020 0.193 0.447 Constant −2.243 −0.690 −21.11 26.04 0.583 13.66 Observations 1,253 1,183 1,183 Number of groups 63 63 63 No. of instruments. 9 16 23 AB2 −1.139 0.0871 0.836 P-value 0.255 0.931 0.403 Hansen’s Test 0.324 1.934 19.00 P-value 0.569 0.983 0.123 F-test 449.9 384646 4601 P-value 0.000 0.000 0.000 Soku et al., Cogent Business & Management (2023), 10: 2210355 https://doi.org/10.1080/23311975.2023.2210355 Page 16 of 19 environmental taxation at the global level to mitigate the risk of carbon leakage. Thirdly, it emphasizes the need for policymakers to adopt policies and programs that promote gender equality in the labor market and ensure that women have access to economic resources. The implications of this research are significant for policymakers, industry stakeholders, and civil society organizations. The findings suggest that environmental taxation policies must be designed carefully to ensure that they do not place an undue burden on vulnerable groups, and that promoting female economic inclusion is crucial for achieving sustainable development. However, there are several limitations to this research that should be considered. Firstly, the research only sampled two theories for the study, and thus, there may be a limitation to the study. Secondly, the research focuses on the nexus between environmental taxation, carbon emissions, and female economic inclusion and does not consider other factors that may affect sustainable development. Lastly, the research only considers 64 countries for the analysis of the nexus between environmental taxation, carbon emissions, and female economic inclusion. Further research is needed to address these limitations and deepen our understanding of the nexus between environmental taxation, carbon emissions, and female economic inclusion. Future research could focus on conducting empirical studies to analyze the effectiveness of environmental taxation policies in reducing carbon emissions and promoting sustainable development. Moreover, future research could explore the potential for environmental taxation policies to impact gender equality and female economic inclusion broadly. Overall, this research highlights the importance of adopting a comprehensive and coordinated approach to promote sustainable development while ensuring that vulnerable groups, such as lowincome households and women, are not disproportionately affected. Author details Michael Gift Soku 1 E-mail: [email protected] ORCID ID: http://orcid.org/0000-0002-8333-2662 Mohammed Amidu 1 ORCID ID: http://orcid.org/0000-0002-0210-137X Coffie William 1 1 Accounting Department, University of Ghana Business School, Legon, Accra, Ghana. Disclosure statement No potential conflict of interest was reported by the authors. Citation information Cite this article as: Environmental tax, carbon emmission and female economic inclusion, Michael Gift Soku, Mohammed Amidu & Coffie William, Cogent Business & Management (2023), 10: 2210355. References Adam, A., & Buabeng, E. (2017). Corrective taxes for environmental protection in Ghana: An evaluation of the plastic waste levy. Journal of Environmental Policy & Planning, 19(4), 403–415. Almunem, A., Hiba, & Gaalool, S. (2018). Determinants of Female Labor Force Participation in Arab Countries, Economic studies 48-2018. Arab Monetary Fund Publishing. Amponsah, P., & Kpienbaareh, D. (2019). 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