Decoupling is a crucial topic in the analysis of sustainable development. Without decoupling, continuing and increasing economic growth in developed and developing countries would come with ever increasing environmental pressures, unavoidably destroying the carrying capacity of ecosystems with corresponding detrimental effects on the environment and societies.
The prime example today is climate change. If we do not succeed in drastically decoupling greenhouse gas emissions from economic growth, the mitigation goals necessary to avoid catastrophic impacts will never be reached. Due to this importance of decoupling, it is thus essential to know how different policy instruments may support its achievement. The aim of this paper is to address the question whether there is a separate contribution from environmental taxation to decoupling and to offer researchers some guidance on how to optimally address this question.
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