Innovation science and technologiy Volume 1 Issue 12 (2025)
ENVIRONMENTAL FISCAL POLICY AS A DRIVER OF GREEN GROWTH AND EMPLOYMENT IN CENTRAL ASIA: EMPIRICAL EVIDENCE
Rakhmatova, Zilola
Abstract
This study investigates the role of environmental fiscal policy as a driver of green economic growth and employmentin Central Asia. The region faces significant climate vulnerability, high carbon intensity, and structural dependence onnatural resources, which increases the relevance of fiscal instruments in supporting sustainable development. Usinga balanced panel dataset for five Central Asian countries over the period 2015–2023, the study applies fixed-effectseconometric models to examine the impact of green public investment and environmental fiscal instruments on realGDP growth and unemployment. The empirical results provide robust evidence in support of the “double dividend”hypothesis. Green public investment is found to have a statistically significant and positive effect on economic growth,while simultaneously contributing to a reduction in unemployment. Environmental fiscal instruments, including pollutionrelatedcharges and green budget expenditures, enhance macroeconomic performance without undermining labourmarket outcomes. The findings suggest that well-designed environmental fiscal policies can reconcile environmentalobjectives with economic and social priorities in transition economies. From a policy perspective, the results highlightthe importance of integrating green public investment, environmental taxation, and budgetary reforms into national fiscalframeworks. The study contributes to the empirical literature on green growth by providing region-specific evidence forCentral Asia and offers practical insights for policymakers seeking to align fiscal policy with climate goals, ESG principles,and the Sustainable Development Goals
environmental fiscal policy; green public investment; economic growth; unemployment; Central Asia; panel data; sustainable development; green economy
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