Effect of Environmental Taxation on Carbon Emissions of World’s Top Cabon Tax Revenue Countries

This study looks at how environmental taxes affect carbon emission levels in the top four nations that earn the most money from carbon taxes between 2015 and 2025. Using secondary data from the World Bank’s Global Data on Carbon Emissions and Carbon Taxes the study employs a simple linear regression model to assess whether higher carbon tax levels significantly reduce national carbon emission rates. High explanatory power is demonstrated by the regression results (R² = 0.64) as well as a significant negative correlation (R = 0.80). This result indicates that up to 64% of carbon reduction levels within the four countries in the sample of study can be linked to the carbon tax with a p-value of P<0.001 and a carbon tax regression coefficient of -0.0001. The tax implication therefore is that a rise in carbon tax could be an effective means of actualising a reduction in national carbon emission. This study demonstrates that the application of carbon tax and the increase thereof is effective carbon reduction policy instrument which countries may consider. It is by extension an veritable tool for accelerating aspired global environmentally sustainable economic development. It concludes that carbon tax offers a dual advantage of enhancing carbon reduction and creating revenue for national governments.