Emigration and fiscal gap in population-exporting region.

This paper analyzes how emigration impacts fiscal gap of population-exporting region in the long term. We construct a general equilibrium model of emigration and fiscal gap and make empirical verification using two-step system GMM model. Among the major lessons from this work, five general and striking results are worth highlighting: (1) the economic losses of emigration are the immediate cause of widening the fiscal gap. (2) in the short and long term, emigration can expand the fiscal revenue gap through the superimposed effect of tax rate and tax base. (3) the gap in fiscal expenditure is widened by the outflow of people in the short term. However, local governments would change the strategy to keep the spending gap from widening in the long run. (4) a positive impact of emigration on the fiscal gap. the more severe population emigration, the larger the fiscal gap. (5) when the trend of emigration becomes irreversible, the subsequent efforts of local governments to expand fiscal expenditure for attraction population would not only fail to revive the regional economy, but aggravate the expansion of fiscal gap. The contribution of research is twofold. On the one hand, it fills the theoretical gap between emigration and fiscal gap because previous studies have paid little attention to the fiscal problems of local government of population outflow. On the other hand, the selection of Northeast China that has been subject to long-term out-of-population migration is good evidence to verify this theory, which is tested very well using the 2S-GMM model. The comprehensive discussion on the relationship between emigration and fiscal gap is helpful to guide those continuous population-exporting regions that are facing a huge fiscal gap how to solve the fiscal gap and unsustainability from the perspective of fiscal revenue and expenditure.

Perceptions of the Minority Tax Experienced by Faculty and Students Underrepresented in Medicine at the University of Wisconsin.

INTRODUCTION: The minority tax in academic medicine can be defined as the additional responsibilities placed on underrepresented in medicine (URiM) faculty, staff, and students in the name of diversity. Often this looks like participating in additional diversity committees, recruitment efforts, and mentorship activities. These extra responsibilities often are not recognized, not included in promotions, and take time from other clinical, research, and traditional scholarly responsibilities. OBJECTIVES: There is a significant gap in the literature examining the experiences of URiM-identifying faculty and students in relation to the minority tax. Our goal was to do a quality improvement project to explore this gap through interviewing URiM-identifying faculty and conducting focus groups with URiM-identifying students, with the goal of making recommendations to help reduce the minority tax burdens to this community. METHODS: A scoping literature review on the minority tax burden in academic medicine was used to inform the development of questions to use in focus groups of URiM University of Wisconsin School of Medicine and Public Health (UWSMPH) students and interviews of URiM UWSMPH faculty members. After development of a facilitation guide, we conducted three 1-hour focus groups with 14 students who identified as URiM and did eight 30-minute interviews with faculty who identified as URiM. A codebook was generated using inductive analysis after reviewing transcripts. Coding was performed independently with 2 separate coders in order to ensure inter-coder reliability. RESULTS: Ninety-one percent of students and 62.5% of faculty endorsed experiencing the minority tax at UWSMPH. Faculty also reported increasing feelings of support due to UWSMPH programs that support URiM faculty. Students reported the minority tax being central to their role as URiM students. Both students and faculty reported that the additional burdens of the minority tax took time away from traditional scholarly activities that were essential for promotion (faculty) or residency (students). CONCLUSIONS: The minority tax burden experienced by URiM faculty and students may negatively affect their careers, as they note spending more time on activities that may not be valued for promotion. It is essential to address these burdens in order to achieve equity within the medical institution.

Does Market-Based Environmental Regulation Improve the Residents' Health: Quasi-Natural Experiment Based on DID.

Improving the residents' health is an important strategy for addressing the declining population dividend in China under the new development paradigm. Based on the panel data of 290 prefecture-level cities in China from 2010 to 2021, this paper uses environmental tax as a quasi-natural experiment, and adopts a DID model to explore the impact of market-based environmental regulation on the residents' health. The results show that the implementation of environmental tax can significantly reduce the population mortality rate, indicating an enhancement in residents' health outcomes. Mechanism analysis shows that environmental tax mainly relies on air quality to improve the residents' health. Also, the heath effect of environmental tax will be effective with the increase of income, and it's stronger in administrative border areas. Heterogeneity analysis shows that the effect of environmental tax on residents' health in western regions and resource-based cities is significantly stronger than those in central and eastern regions and non-resource-based cities. This paper provides new evidence for a comprehensive understanding of the impact of market-based environmental regulations on residents' well-being, offering insights for the implementation of green development strategies.

Uncovering physical activity trade-offs in transportation policy: A spatial agent-based model of Bogotá, Colombia.

BACKGROUND: Transportation policies can impact health outcomes while simultaneously promoting social equity and environmental sustainability. We developed an agent-based model (ABM) to simulate the impacts of fare subsidies and congestion taxes on commuter decision-making and travel patterns. We report effects on mode share, travel time and transport-related physical activity (PA), including the variability of effects by socioeconomic strata (SES), and the trade-offs that may need to be considered in the implementation of these policies in a context with high levels of necessity-based physical activity. METHODS: The ABM design was informed by local stakeholder engagement. The demographic and spatial characteristics of the in-silico city, and its residents, were informed by local surveys and empirical studies. We used ridership and travel time data from the 2019 Bogotá Household Travel Survey to calibrate and validate the model by SES. We then explored the impacts of fare subsidy and congestion tax policy scenarios. RESULTS: Our model reproduced commuting patterns observed in Bogotá, including substantial necessity-based walking for transportation. At the city-level, congestion taxes fractionally reduced car use, including among mid-to-high SES groups but not among low SES commuters. Neither travel times nor physical activity levels were impacted at the city level or by SES. Comparatively, fare subsidies promoted city-level public transportation (PT) ridership, particularly under a 'free-fare' scenario, largely through reductions in walking trips. 'Free fare' policies also led to a large reduction in very long walking times and an overall reduction in the commuting-based attainment of physical activity guidelines. Differential effects were observed by SES, with free fares promoting PT ridership primarily among low-and-middle SES groups. These shifts to PT reduced median walking times among all SES groups, particularly low-SES groups. Moreover, the proportion of low-to-mid SES commuters meeting weekly physical activity recommendations decreased under the 'freefare' policy, with no change observed among high-SES groups. CONCLUSIONS: Transport policies can differentially impact SES-level disparities in necessity-based walking and travel times. Understanding these impacts is critical in shaping transportation policies that balance the dual aims of reducing SES-level disparities in travel time (and time poverty) and the promotion of choice-based physical activity.

The role of ICT investment, digital financial inclusion, and environmental tax in promoting sustainable energy development in the MENA region: Evidences with Dynamic Common Correlated Effects (DCE) and instrumental variable-adjusted DCE.

His research investigates the interplay among investment in Information and Communication Technology [ICT], digital financial inclusion, environmental tax policies, and their impact on the progression of sustainable energy development within the Middle East and North Africa [MENA] region. Recognizing the distinctive hurdles impeding sustainable energy advancement, effective policy formulation and implementation in MENA necessitate a comprehensive understanding of these variables. Employing a Dynamic Common Correlated Effects [DCE] model alongside an instrumental variable-adjusted DCE approach, this study explores the relationship between ICT investment, digital financial inclusion, environmental tax, and sustainable energy development. The DCE model facilitates the analysis of dynamic effects and potential correlations, while the instrumental variable-adjusted DCE model addresses issues pertaining to endogeneity. The results indicate that both ICT investment and the promotion of digital financial inclusion significantly and positively impact sustainable energy development in the MENA region. Additionally, the study underscores the importance of environmental tax implementation in fostering sustainable energy advancement, highlighting the critical role of environmental policy interventions. Based on these findings, governmental prioritization of ICT investment and initiatives for digital financial service integration is recommended to bolster sustainable energy growth in MENA. Furthermore, the adoption of efficient environmental tax measures is essential to incentivize sustainable energy practices and mitigate environmental degradation. These policy recommendations aim to create a conducive environment for sustainable energy progression in the MENA region, contributing to both economic prosperity and environmental conservation.

Impact of urban land use tax on carbon emission efficiency of urban construction land--Analysis based on panel data of 30 provinces in China.

Reducing urban carbon emissions is an important path for ecological civilization construction, which can be achieved through the adjustment of urban land use tax. Using provincial Panel data from 2011 to 2021, based on the analysis of urban carbon emission efficiency values using a non radial SBM model, the Tobit random effects panel model is used to explore the institutional impact of urban land use tax. The study found that urban land use tax has a significant positive promoting effect on carbon emission efficiency and shows certain regional differences. The eastern region is higher in overall efficiency and technical efficiency than the central and western regions, but the central region has the highest overall scale efficiency. At the same time, factors such as population urbanization, industrial structure, and energy-saving technology level will also have a certain impact on this effect. Based on the institutional effect of improving carbon emission efficiency, the article proposes corresponding countermeasures and suggestions from aspects such as tax rate levels, tax system adjustments, tax incentives, and differentiated regional arrangements.

Economic Evaluations of Obesity-Targeted Sugar-Sweetened Beverage (SSB) Taxes-A Review to Identify Methodological Issues.

INTRODUCTION: Economic evaluations of public health interventions like sugar-sweetened beverage (SSB) taxes face difficulties similar to those previously identified in other public health areas. This stems from challenges in accurately attributing effects, capturing outcomes and costs beyond health, and integrating equity effects. This review examines how these challenges were addressed in economic evaluations of SSB taxes. METHODS: A systematic review was conducted to identify economic evaluations of SSB taxes focused on addressing obesity in adults, published up to February 2021. The methodological challenges examined include measuring effects, valuing outcomes, assessing costs, and incorporating equity. RESULTS: Fourteen economic evaluations of SSB taxes were identified. Across these evaluations, estimating SSB tax effects was uncertain due to a reliance on indirect evidence that was less robust than evidence from randomised controlled trials. Health outcomes, like quality-adjusted life years, along with a healthcare system perspective for costs, dominated the evaluations of SSB taxes, with a limited focus on broader non-health consequences. Equity analyses were common but employed significantly different approaches and exhibited varying degrees of quality. CONCLUSION: Addressing the methodological challenges remains an issue for economic evaluations of public health interventions like SSB taxes, suggesting the need for increased attention on those issues in future studies. Dedicated methodological guidelines, in particular addressing the measurement of effect and incorporation of equity impacts, are warranted.

Equity implications of tobacco taxation: results from WHO FCTC investment cases.

BACKGROUND: Across time, geographies and country income levels, smoking prevalence is highest among people with lower incomes. Smoking causes further impoverishment of those on the lower end of the income spectrum through expenditure on tobacco and greater risk of ill health. METHODS: This paper summarises the results of investment case equity analyses for 19 countries, presenting the effects of increased taxation on smoking prevalence, health and expenditures. We disaggregate the number of people who smoke, smoking-attributable mortality and cigarette expenditures using smoking prevalence data by income quintile. A uniform 30% increase in price was applied across countries. We estimated the effects of the price increase on smoking prevalence, mortality and cigarette expenditures. RESULTS: In all but one country (Bhutan), a one-time 30% increase in price would reduce smoking prevalence by the largest percent among the poorest 20% of the population. All income groups in all countries would spend more on cigarettes with a 30% increase in price. However, the poorest 20% would pay an average of 12% of the additional money spent. CONCLUSIONS: Our results confirm that health benefits from increases in price through taxation are pro-poor. Even in countries where smoking prevalence is higher among wealthier groups, increasing prices can still be pro-poor due to variable responsiveness to higher prices. The costs associated with higher smoking prevalence among the poor, together with often limited access to healthcare services and displaced spending on basic needs, result in health inequality and perpetuate the cycle of poverty.

The relationship between the price and demand of alcohol, tobacco, unhealthy food, sugar-sweetened beverages, and gambling: an umbrella review of systematic reviews.

BACKGROUND: The WHO highlight alcohol, tobacco, unhealthy food, and sugar-sweetened beverage (SSB) taxes as one of the most effective policies for preventing and reducing the burden of non-communicable diseases. This umbrella review aimed to identify and summarise evidence from systematic reviews that report the relationship between price and demand or price and disease/death for alcohol, tobacco, unhealthy food, and SSBs. Given the recent recognition as gambling as a public health problem, we also included gambling. METHODS: The protocol for this umbrella review was pre-registered (PROSPERO CRD42023447429). Seven electronic databases were searched between 2000-2023. Eligible systematic reviews were those published in any country, including adults or children, and which quantitatively examined the relationship between alcohol, tobacco, gambling, unhealthy food, or SSB price/tax and demand (sales/consumption) or disease/death. Two researchers undertook screening, eligibility, data extraction, and risk of bias assessment using the ROBIS tool. RESULTS: We identified 50 reviews from 5,185 records, of which 31 reported on unhealthy food or SSBs, nine reported on tobacco, nine on alcohol, and one on multiple outcomes (alcohol, tobacco, unhealthy food, and SSBs). We did not identify any reviews on gambling. Higher prices were consistently associated with lower demand, notwithstanding variation in the size of effect across commodities or populations. Reductions in demand were large enough to be considered meaningful for policy. CONCLUSIONS: Increases in the price of alcohol, tobacco, unhealthy food, and SSBs are consistently associated with decreases in demand. Moreover, increasing taxes can be expected to increase tax revenue. There may be potential in joining up approaches to taxation across the harm-causing commodities.

The role of environmental tax on the environmental quality in EU counties: evidence from panel vector autoregression approach.

This study intends to analyze the influence of environmental taxes on pollution in EU-27 nations. Furthermore, energy from renewable sources consumption and urbanization are employed to clarify CO2 emissions in this study that tests the EKC hypothesis. According to the findings, an increase in environmental taxes reduces CO2 emissions by 0.14%. Also, the data supported the validity of the EKC concept. The findings of the causality test demonstrated that there is a bidirectional causal link between CO2 emissions and environmental taxes. These results reflect that environmental tax revenues contribute to sustainability as an effective policy tool in EU countries. Policies regarding environmental tax enforcement come to the fore in terms of both keeping the balance in economic activities and serving sustainability.

Sweetened Beverage Tax Implementation and Change in Body Mass Index Among Children in Seattle.

Importance: Sweetened beverage taxes have been associated with reduced purchasing of taxed beverages. However, few studies have assessed the association between sweetened beverage taxes and health outcomes. Objective: To evaluate the association between the Seattle sweetened beverage tax and change in body mass index (BMI) among children. Design, Setting, and Participants: In this longitudinal cohort study, anthropometric data were obtained from electronic medical records of 2 health care systems (Kaiser Permanente Washington [KP] and Seattle Children's Hospital Odessa Brown Children's Clinic [OBCC]). Children were included in the study if they were aged 2 to 18 years (between January 1, 2014, and December 31, 2019); had at least 1 weight measurement every year between 2015 and 2019; lived in Seattle or in urban areas of 3 surrounding counties (King, Pierce, and Snohomish); had not moved between taxed (Seattle) and nontaxed areas; received primary health care from KP or OBCC; did not have a recent history of cancer, bariatric surgery, or pregnancy; and had biologically plausible height and BMI (calculated as weight in kilograms divided by height in meters squared). Data analysis was conducted between August 5, 2022, and March 4, 2024. Exposure: Seattle sweetened beverage tax (1.75 cents per ounce on sweetened beverages), implemented on January 1, 2018. Main Outcomes and Measures: The primary outcome was BMIp95 (BMI expressed as a percentage of the 95th percentile; a newly recommended metric for assessing BMI change) of the reference population for age and sex, using the Centers for Disease Control and Prevention growth charts. In the primary (synthetic difference-in-differences [SDID]) model used, a comparison sample was created by reweighting the comparison sample to optimize on matching to pretax trends in outcome among 6313 children in Seattle. Secondary models were within-person change models using 1 pretax measurement and 1 posttax measurement in 22 779 children and fine stratification weights to balance baseline individual and neighborhood-level confounders. Results: The primary SDID analysis included 6313 children (3041 female [48%] and 3272 male [52%]). More than a third of children (2383 [38%]) were aged 2 to 5 years); their mean (SE) age was 7.7 (0.6) years. With regard to race and ethnicity, 789 children (13%) were Asian, 631 (10%) were Black, 649 (10%) were Hispanic, and 3158 (50%) were White. The primary model results suggested that the Seattle tax was associated with a larger decrease in BMIp95 for children living in Seattle compared with those living in the comparison area (SDID: -0.90 percentage points [95% CI, -1.20 to -0.60]; P < .001). Results from secondary models were similar. Conclusions and Relevance: The findings of this cohort study suggest that the Seattle sweetened beverage tax was associated with a modest decrease in BMIp95 among children living in Seattle compared with children living in nearby nontaxed areas who were receiving care within the same health care systems. Taken together with existing studies in the US, these results suggest that sweetened beverage taxes may be an effective policy for improving children's BMI. Future research should test this association using longitudinal data in other US cities with sweetened beverage taxes.

Environmental taxation of plastic bags and substitutes: Balancing marine pollution and climate change.

Several countries have imposed either a ban or a tax on single-use plastic packaging, motivated by their contribution to marine plastic pollution. This may lead consumers to opt for similar unregulated substitutes, potentially undermining or even counteracting the intended effect of the policy instrument. The purpose of this study is to theoretically and empirically compare the environmental and welfare effects of the first-best Pigouvian taxes on both plastic bags and a substitute (paper bags), with two alternative second-best policy instruments: a tax on plastic products alone, and a common uniform tax on all packaging materials. The empirical analysis accounts for two different types of environmental externalities from the use of both bag types: marine pollution and greenhouse gas emissions. It also compares results for two countries, Denmark and the USA, which differ in the demand for plastic and paper bags. The theoretical analysis shows that a unilateral tax on plastic bags should equal the marginal environmental damage of plastic bags minus a fraction of the marginal environmental cost of paper bags, hence being lower than the Pigouvian tax. The optimal common tax should equal a weighted average of the marginal environmental damage of the two bag types and would be lower than the Pigouvian tax on plastics if the marginal external cost of plastic bags exceeds that for paper bags. The empirical analysis shows that for default parameters, the variation in tax level across the studied scenarios is small. It also shows that if Pigouvian taxes cannot be implemented, a common uniform tax on both bag types would result in a higher welfare gain than a tax on plastic bags alone. Sensitivity analysis reveals that the level of the second-best taxes and their associated environmental and welfare impacts are sensitive to assumptions regarding the littering rate and decay rate of plastic bags in the marine environment.

A study on the "Porter Hypothesis" effect of the regulatory measures of the environmental protection tax law in the post-pandemic era.

The implementation of the Environmental Protection Tax Law was a significant milestone in China's environmental tax reform. The implementation of this law was influenced throughout the three-year period of epidemic prevention and control (from early 2020 to the end of 2022). Heavily polluting enterprises are the primary focus of regulations under the Environmental Protection Tax Law. This study conducts an empirical analysis using a structural equation model, leveraging sample data obtained from heavily polluting enterprises in China. The findings indicate that during the three-year period of epidemic prevention and control, the Porter Hypothesis effect was realized in terms of tax fairness but not in terms of tax rationality. Therefore, environmental tax law reforms should be pursued and tax authorities in China should make vigorous efforts to enhance the rationality of environmental taxation. This would improve the comprehensiveness of the "Porter Hypothesis" effect, fully harnessing the dual functions of environmental protection and the economic driving force embodied by the Environmental Protection Tax Law.

Evaluating the impact of sugar-sweetened beverages tax on overweight, obesity, and type 2 diabetes in an affluent Asian setting: A willingness-to-pay survey and simulation analysis.

BACKGROUND: The potential health effects of taxing sugar-sweetened beverages (SSBs) has been insufficiently examined in Asian contexts. This study aimed to assess the impact of SSB taxation on the prevalence of obesity/overweight and type 2 diabetes mellitus (T2DM) in Hong Kong using a willingness-to-pay (WTP) survey and simulation analysis. METHODS: A random telephone survey was conducted with 1000 adults from May to June 2020. We used a contingent valuation approach to assess individuals' WTP for SSBs under four tax payment scenarios (5%, 10%, 40%, and 50% of the current market price). Based on the WTP, a simulation analysis was conducted to project changes in SSB purchase and associated reductions in the prevalence of obesity/overweight and T2DM over a 10-year simulation period. FINDINGS: When 5% and 10% taxation rates were introduced, approximately one-third of the population were unwilling to maintain their SSB purchase. Our simulation demonstrated a gradual decline in the prevalence of obesity/overweight and diabetes with a more pronounced decrease when higher taxation rates were introduced. 10% taxation resulted in a mean reduction of 1532.7 cases of overweight/obesity per 100 thousand population at the sixth year, while T2DM prevalence decreased by 267.1 (0.3%). CONCLUSIONS: This study underscores the effects of an SSB tax on purchase behaviors and health outcomes in an affluent Asia setting, with a more pronounced influence on adult population. These findings are expected to inform policymakers in making decisions regarding an effective and equitable tax rate on SSBs.

The impact of Chinese foreign direct investment and environmental tax revenues on air degradation in Europe: a spatial regression approach, 2000-2020.

This study analyzes air pollution through the effects of China's FDI in 27 European countries over a 20-year period, with a focus on the impact of environmental tax revenues (ETRs) and the environmental context in China. The relationship is estimated through spatial regressions that account for the presence of air pollutants in neighboring countries. The findings suggest that China's FDI in Europe does not contribute to air pollution but rather has a positive impact. The presence of environmental charges filters out non-polluting investments, which has a non-linear relationship with PM2.5 pollution rates. The study also concludes that air pollution is closely linked to the global environmental context, highlighting the positive effects of international agreements in the fight against climate change. Specifically, the study finds a link between China's efforts to address its polluting activities and their impact on European air quality.

Commentary: The Conflict Between Protecting Public Health and Raising Tax Revenue.

When Canada created a legal market for cannabis, it gave priority to public health by restricting marketing using branding and promotion via social and other media sources. These restrictions to protect the public from harmful use are under increasing pressure from the legal cannabis industry, which claims that they prevent them from outcompeting and replacing the illicit market. Public health advocates are reasonably concerned that these restrictions will not hold given our experience with alcohol, tobacco and gambling where governments' fiscal dependence on tax revenue favours the liberalization of regulation.

Testing the impact of environmental taxation and IFRS adoption on consumption-based carbon in European countries.

Several governance regulations have been adopted in European countries to promote environmental sustainability, such as environmental taxation and environmental disclosures in financial reports. In this context, this paper examines the linkage between environmental taxation, International Financial Reporting Standards (IFRS), and environmental sustainability in European countries from 1994 to 2018. Unlike earlier empirical studies, the present work is the first to assess the impact of environmental taxation and IFRS adoption on consumption-based carbon emissions. In order to yield valid and reliable outcomes, the modern econometric method that is vigorous to cross-sectional dependence and slope heterogeneity was employed. Likewise, the study uses the novel method of moment quantile regressions (MMQR). The MMQR outcomes illustrated that environmental taxation significantly negatively affects consumption-based emissions in European countries, indicating that environmental taxation has a positive effect on the ecological sustainability. Besides, the findings show that IFRS negatively affects consumption-based emissions, while economic growth positively affects the level of consumption-based emissions. Therefore, European governments must use fiscal and financial policies to mitigate ecological pollution. Moreover, more environmental, social, and governance (ESG) disclosure in European industries could also help promote environmental sustainability in European countries.

Estimating the effect of corporate integrity culture on tax avoidance using a text-based approach: A research note.

Tax avoidance holds immense importance due to its substantial implications for government revenues and the fair allocation of resources. Consequently, understanding the factors that shape tax avoidance is critically important. Exploiting a cutting-edge measure of corporate integrity derived from state-of-the-art machine learning algorithms and textual analysis, we explore the effect of corporate integrity on tax avoidance. Our text-based measure is based on a textual analysis of earnings conference call transcripts. Our findings show that companies with greater corporate integrity are significantly less involved in tax avoidance. Further analysis corroborates the results, i.e., propensity score matching, entropy balancing, and an instrumental variable analysis. Our findings are especially noteworthy as they demonstrate that corporate culture, although intangible in nature, exerts a substantial influence on corporate behavior.

Inequality of the crowding-out effect of tobacco expenditure in Colombia.

In recent decades, policy initiatives involving increases in the tobacco tax have increased pressure on budget allocations in poor households. In this study, we examine this issue in the context of the expansion of the social welfare state that has taken place over the last two decades in several emerging economies. This study explores the case of Colombia between 1997 and 2011. In this period, the budget share of the poorest expenditure quintile devoted to tobacco products of smokers' households doubled. We analyse the differences between the poorest and richest quintiles concerning the changes in budget shares, fixing a reference population over time to avoid demographic composition confounders. We find no evidence of crowding-out of education or healthcare expenditures. This is likely to be the result of free universal access to health insurance and basic education for the poor. For higher-income households, tobacco crowds out expenditures on entertainment, leisure activities, and luxury expenditures. This finding should reassure policymakers who are keen to impose tobacco taxes as an element of their public health policy.

Comparative study of environmental and monetary policies in an R&D-based growth model.

ESG investment and financing is a response to global warming and toxic carbon emissions. This is because market and financial development is expected to contribute to de-carbonisation in relevant firms. However, the opposite might occur with carbon-intensive industries. An option is to introduce a carbon tax or an emissions cap but this varies across countries. The impact of environmental policies and the development of financial markets are thus relevant factors to analyse in the debate regarding the best pathways to reduce pollution. This impact is not conclusive in extant studies. In order to meet this gap and to devise effective solutions to this problem, the mechanisms behind them need to be empirically clarified. To achieve this research objective, this study analyses the impact of these factors on welfare through pollution and growth. It examines the respective regulatory regimes of environmental taxes and emission quotas, using an R&D-based growth model with a monetary component. This is to identify the relationship between pollution emissions and financial markets. Results reveal that increasing environmental taxes and reducing nominal interest rates does in fact lead to pollution reduction and economic growth, as well as an increase in the quantity of money and credit through deflation. Reducing emission allowances has a similar effect. However, under emission quotas, it is found that a reduction in the nominal interest rate affects neither pollution emissions nor economic growth, although it does affect the quantity of money and credit. This is because the Fisher effect disappears when the emission quota caps output. A U-shaped relationship between emission allowances and the amount of credit then arises. Under an emissions trading system, the relationship between pollution emissions and financial development can be a win-win relationship or a trade-off relationship. This depends on the emission quota and nominal interest rate. These results suggest that, in addition to environmental policy instruments, financial market development can contribute to decarbonisation if there is the right environmental financial policy. A mix of environmental and financial policies is thus important in linking financial market development to decarbonisation.