GREEN TAX POLICY AS A CATALYST FOR LOW-CARBON TRANSFORMATION: EVIDENCE, MECHANISMS, AND POLICY IMPLICATIONS FOR EMERGING ECONOMIES

Abstract

Green tax policies have become a central instrument in fiscal environmental governance, aiming to internalize ecological externalities and redirect economic activity toward sustainable trajectories. This article investigates the role of green taxation in accelerating low-carbon transformation through productivity enhancement, investment reallocation, and technological upgrading. Drawing on international empirical evidence and macroeconomic data from emerging economies, the study examines how environmental taxation influences firm behavior, energy structure, and green total factor productivity. Particular attention is paid to policy transmission channels, efficiency trade-offs, and institutional preconditions. Using Uzbekistan as an illustrative case, the paper analyzes recent fiscal-environmental reforms and presents sector-level emission and tax revenue data. The findings indicate that green taxes are most effective when integrated with innovation incentives, financial instruments, and regulatory consistency. Policy recommendations emphasize adaptive tax design, monitoring mechanisms, and alignment with green finance frameworks to avoid investment distortions while maximizing environmental gains.