Do eco-innovations and disaggregated environmental taxes promote load capacity factor? Evidence from Australia

Environmental taxes have emerged as a key policy tool for internalizing environmental costs and promoting sustainable development. This study investigates the effects of eco-innovations and various types of environmental taxes on Australia's load capacity factor (LCF) from 1995Q1 to 2022Q4. Employing advanced econometric techniques, including quantile-on-quantile and cross-quantile correlation approaches, this study explores long-term cointegration among eco-innovations, environmental tax categories, and the LCF in Australia. The results indicate that eco-innovations significantly enhance LCF, reflecting their role in strengthening environmental resilience. Moreover, disaggregated environmental taxes positively influence the LCF, especially those targeting pollution, energy, transport, and resources. The findings support the integration of environmental and fiscal policies to address environmental challenges and achieve long-term sustainability goals.