The Effectiveness of Carbon Taxes in Reducing Carbon Emissions: A Systematic Literature Review

Abstract

This systematic literature review examines whether and under what conditions carbon taxes reduce national and cross-country carbon emissions. Using the PRISMA 2020 framework, Scopus-indexed journal articles published between 1 January 2015 and 1 April 2026 in Business, Management, and Accounting were reviewed. From 119 records, 11 studies met the inclusion criteria and were synthesized qualitatively through structured data extraction and quality appraisal. The findings show that carbon taxes can reduce emissions, but their effectiveness depends on revenue recycling, tax rates, sectoral coverage, exemptions, economic structure, trade exposure, and the distinction between territorial and consumption-based emissions. The review also reveals limited ex post evidence, as existing studies are dominated by CGE, GTAP, and scenario-based models.