Testing for Causality between Climate Policies and Carbon Emissions Reduction

In this paper, we evaluate the causal effects of climate policies on carbon emissions reductions. Using Sweden as a case study, we compare the effects of the domestic carbon tax and the Kyoto Protocol over the period 1965--2018. A simulation exercise shows that the test for causality in the frequency domain offers policy-makers a useful tool for evaluating the effect of public policies. Our empirical results indicate a significant causal effect of the carbon tax policy on carbon intensity dynamics in the long run