Green tax and green technology as drivers of environmental sustainability in ten Central and Eastern European countries: new insights from MMQR

Rising environmental vulnerabilities, particularly in transition economies, have made policymakers’ interest in fiscal and technological instruments more crucial than ever. Nevertheless, the existing literature has insufficiently addressed the joint assessment of green taxation and green technology and how these effects vary according to environmental performance levels. In this context, this study investigates the effects of green taxes and green technologies on environmental sustainability in the 10 Central and Eastern European countries (Bulgaria, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia) over the period 1995–2022 using the method of moments quantile regression (MMQR) approach. Unlike most previous studies, this study measures environmental sustainability not merely through unidimensional indicators such as emissions or ecological footprint, but through the load capacity factor (LCF), which simultaneously captures both the supply (biocapacity) and demand (ecological footprint) dimensions of the environment. This study pioneers the joint examination of green taxes and green technologies through LCF and MMQR in the CEECs-10 context. The MMQR results indicate that economic growth negatively affects environmental sustainability across all quantiles, with intensifying effects at higher quantiles, whereas renewable energy consumption exerts positive effects across all quantiles, with marginally stronger impacts at lower quantiles. Notably, green taxes become significant only at middle and high quantiles, whereas green technologies exhibit significant effects at lower and middle quantiles, becoming statistically insignificant at high quantiles. In light of these results, this study recommends that policymakers prioritize environment-oriented development strategies by strengthening renewable energy infrastructure, employing green taxes to deter and guide behavior, and promoting green technology investments to curtail environmental degradation and support sustainable development.