The research team, led by Hammed Musibau of Adelaide University’s School of Economics alongside Abdulrasheed Zakari, Felix Orole, and Vikniswari Vija Kumaran, set out to answer a deceptively simple question. Do green taxes and renewable energy actually work to cut carbon emissions in wealthy economies, or do they merely look good on paper? To find out, they assembled nearly four decades of data on tourism activity, energy consumption, taxation, and emissions across the OECD membership, the club of mostly high-income countries responsible for a disproportionate share of historical carbon output.

What makes the study technically notable is its treatment of model uncertainty. In long-run energy-environment research, analysts typically must choose one statistical specification from many plausible alternatives, and the choice itself can shape the conclusions. The team sidestepped this trap by deploying two complementary techniques: Bayesian Model Averaging and Weighted-Average Least Squares. Rather than betting on a single model, these methods evaluate the full space of candidate specifications and average the results, weighting each model by how well it fits the data. The upshot is that the reported relationships between tourism, taxation, renewables, and emissions are far less likely to be artifacts of an arbitrary modeling decision.

The headline finding is stark. Tourism expansion consistently and significantly increases carbon emissions across the OECD panel. The mechanism is intuitive once you unpack it. International arrivals require aviation, which remains one of the hardest sectors to decarbonize; hotel chains run energy-intensive heating, cooling, and laundry systems around the clock; cruise ships burn heavy fuel oil; and destination economies build roads, airports, and resorts whose construction is itself carbon-heavy. As tourist arrivals climb, so does the energy demand that underpins the entire travel economy, and in most OECD countries that demand is still met substantially by fossil fuels.

Renewable energy, by contrast, emerges as the study’s most reliable hero. Across all specifications and averaging techniques, green energy consumption consistently contributes to emission reductions. Every megawatt-hour of wind, solar, hydro, or geothermal power that displaces fossil generation shaves emissions directly, and the effect holds regardless of income level or tourism intensity. For the authors, this underscores a central policy point: renewable deployment is not merely a climate accessory but the backbone of any credible decarbonization strategy, particularly in economies whose service sectors, including tourism, keep expanding.

Environmental taxation tells a more complicated story. When considered in isolation, green taxes do not consistently reduce emissions across OECD countries. The authors attribute this disappointing record to two structural weaknesses. First, tax exemptions carve out large chunks of the taxable base, often for politically powerful industries such as aviation fuel, shipping, and energy-intensive manufacturing. Second, enforcement is uneven, so the effective tax rate faced by polluters varies widely even within the same jurisdiction. A carbon price that half the economy can dodge is, in effect, not much of a price at all.

Yet the picture changes dramatically when taxation is examined in interaction with tourism. The study finds that the combination of tourism activity and environmental taxation reveals that well-designed fiscal instruments can mitigate tourism-induced emissions. In other words, a green tax that appears ineffective on average may work precisely where the emissions pressure is greatest, discouraging carbon-intensive travel patterns, nudging airlines and hotel operators toward efficiency, and channeling revenue into cleaner infrastructure. Design matters: broad bases, minimal exemptions, and credible enforcement transform a symbolic levy into a genuine behavioral signal.

Income level adds another layer of nuance. The analysis shows that environmental taxes are effective in reducing emissions in high-income OECD economies, while their impact remains insignificant in upper-middle-income countries within the panel. The authors suggest several plausible explanations. Wealthier economies tend to have mature tax administrations, higher capacity to monitor and penalize noncompliance, and industrial structures more amenable to switching toward cleaner technologies in response to price signals. In upper-middle-income settings, weaker enforcement capacity and a heavier reliance on exemptions can neutralize the intended incentive, leaving the tax as a revenue instrument rather than an emissions instrument.

For policymakers, the study’s synthesis is clear. Fiscal instruments and energy-transition policies should not operate on separate tracks. A carbon tax works best when the taxed economy has genuine alternatives to fossil energy, which means renewable investment must scale alongside taxation. Conversely, renewables flourish fastest when carbon prices make fossil alternatives progressively more expensive, generating both the incentive and, through tax revenue, some of the funding for the transition. The authors argue that integrating environmental taxation with renewable energy investment produces carbon mitigation strategies that align fiscal tools with long-term sustainability objectives rather than treating each policy as a standalone fix.

The timing of these findings could hardly be more relevant. Tourism has rebounded strongly since the pandemic, international arrivals are climbing back toward and beyond pre-2020 levels, and OECD governments face mounting pressure to honor net-zero commitments while protecting a sector that employs hundreds of millions of people worldwide. The research offers a technical but actionable roadmap: broaden green tax bases, close exemptions, strengthen enforcement, and pour the resulting revenue and political capital into renewable energy. Done well, the study suggests, the world can keep welcoming travelers without mortgaging the climate. Done poorly, tourism’s carbon bill will keep rising, and green taxes will remain what they too often are today: well-intentioned instruments with well-documented escape hatches.

Subject of Research: Tourism, green energy, and environmental taxation effects on carbon emissions in OECD countries

Article Title: Tourism, green energy, and environmental taxation effects on carbon emissions in OECD countries

Article References: Musibau, H., Zakari, A., Orole, F., & Kumaran, V. V. (2026). Tourism, green energy, and environmental taxation effects on carbon emissions in OECD countries. Discover Sustainability. https://doi.org/10.1007/s43621-026-04342-y

Image Credits: AI Generated

DOI: 10.1007/s43621-026-04342-y

Keywords: Tourism, green, energy, environmental, taxation, effects, carbon, emissions, OECD, countries, scientific research

The Distinguished Professor Awards program is designed to recognize faculty members with highly distinguished accomplishments as well as those who display exceptional promise for continued achievement. Beyond past performance, the program looks for scholars who maintain an extraordinary level of activity in their research and scholarly work, meaning that recipients are expected not simply to have compiled an impressive record but to remain at the forefront of their fields throughout the award term. For a business school, the recognition of an accounting scholar at this level underscores the discipline’s central role in modern research on markets, corporate behaviour, and public policy.

Edwards serves as a professor and the area coordinator of accounting at the Rotman School, a role that combines his own research agenda with responsibility for shaping the direction of one of Canada’s leading accounting groups. His scholarly focus sits at the intersection of taxation and capital markets, an area of research that examines how tax rules, tax enforcement, and tax-related disclosures influence the decisions of firms, investors, and regulators. Work in this field often draws on large administrative datasets and empirical methods from economics and finance to test how tax considerations ripple through equity valuations, corporate investment, and financial reporting choices.

The reach of Edwards’s research is reflected in the venues in which it has appeared. His work has been published in the Accounting Review, the Journal of Accounting and Economics, the Journal of Financial Economics, Management Science, Contemporary Accounting Research, the Journal of Financial and Quantitative Analysis, the Journal of the American Taxation Association, the National Tax Journal, and Tax Notes. Together, these outlets span the leading journals of accounting, finance, and management science, indicating that his findings have resonated across disciplinary boundaries rather than within a single academic silo. Publication in journals of this caliber typically follows a demanding peer-review process in which empirical designs, data quality, and the robustness of conclusions are scrutinized extensively before acceptance.

Research on taxation and capital markets matters well beyond the academy. Tax policy shapes where firms invest, how they structure their operations, and how they report results to investors. When researchers can credibly measure how changes in tax rules or enforcement affect corporate behaviour and market prices, policymakers gain evidence with which to design more efficient and equitable systems, and investors gain a clearer picture of how tax considerations are reflected in asset values. Scholars in this tradition frequently study questions such as how firms respond to shifts in tax rates, how tax information is incorporated into analyst forecasts and security prices, and how the organizational and legal environment of taxation interacts with financial reporting incentives.

In addition to his research, Edwards holds significant editorial responsibilities that give him a hand in shaping the direction of his field. He serves as a deputy editor-in-chief for Contemporary Accounting Research, a leading journal that publishes theoretical and empirical work spanning the accounting discipline, and he is a member of the Editorial Board for the Accounting Review, one of the most selective journals in the profession. Editorial roles of this kind involve evaluating submissions, guiding revisions, and upholding standards of rigor and relevance, and they are typically entrusted to scholars whose own work has helped define the standards their journals seek to maintain.

Edwards joined the Rotman School in 2011, building a career at an institution situated at the heart of Canada’s commercial capital. Before entering academia, he worked as a tax specialist and auditor with KPMG LLP, one of the world’s largest professional services firms. That practitioner background is a notable feature of his profile: scholars who have worked inside tax practice and audit bring firsthand familiarity with how tax positions are developed, documented, and reviewed, and how financial statements are prepared and examined. This experience often informs the questions empirical researchers choose to ask and helps them interpret the institutional details embedded in the data they analyze.

The combination of practical experience, editorial leadership, and a prolific publication record illustrates the model of scholarly contribution that the Distinguished Professor Awards are intended to honour. Accounting research of the kind Edwards pursues depends on the patient accumulation of evidence: assembling datasets that link tax records, financial statements, and market outcomes; designing identification strategies that separate the effects of taxation from other forces moving markets; and subjecting results to sensitivity checks that test whether findings survive alternative assumptions. The recognition of such work at the university level highlights the technical sophistication underlying a field that outsiders sometimes mistake for purely procedural expertise.

The award also arrives at a moment when questions of taxation and corporate transparency are unusually prominent in public debate. Governments around the world continue to adjust corporate tax regimes, international agreements aim to coordinate minimum taxation across jurisdictions, and investors increasingly demand clarity about the tax risks embedded in the firms they hold. Research that clarifies how tax rules and their enforcement affect firm behaviour and market outcomes speaks directly to these debates, and scholars who can bridge rigorous empirical methods with institutional knowledge of tax practice occupy a valuable position in that conversation.

For the Rotman School, the honour adds to a research environment that the school actively promotes through platforms such as the Rotman Insights Hub, which brings together articles, podcasts, opinions, books, and videos representing the latest in management thinking. As part of the University of Toronto, a global centre of research and teaching excellence, Rotman describes its purpose as creating value for business and society by bringing together diverse views and initiatives. In Edwards, the school and the university now count a Distinguished Professor of Accounting and Taxation among their faculty, a title he will carry for the next five years as he continues a research program that has already reached the leading journals of his discipline and, through them, the wider community of scholars, practitioners, and policymakers who rely on that work.

Subject of Research: Recognition of accounting professor Alexander Edwards's research on taxation and capital markets with a University of Toronto Distinguished Professor Award

Article Title: Accounting professor receives Distinguished Professor Award at the University of Toronto’s Rotman School of Management

Article References: Accounting professor receives Distinguished Professor Award at the University of Toronto’s Rotman School of Management. (n.d.). Original publication

Image Credits: AI Generated

DOI: Not provided

Keywords: Alexander Edwards, Rotman School of Management, University of Toronto, Distinguished Professor Award, accounting, taxation, capital markets, accounting research, Contemporary Accounting Research, Accounting Review, KPMG, business school

The study, published in The Quarterly Journal of Economics, used an elegant experimental design to probe moral intuitions about distributive justice. Participants were asked to decide how bonuses should be allocated to real workers on an online labor market platform, choosing between allocation based on measured performance and allocation through a random lottery. This approach allowed the researchers to observe whether people reward merit or tolerate chance when real money is at stake for actual workers, rather than merely recording abstract opinions. The same participants were then asked about their support for redistribution through policy measures, including higher taxes on the wealthy, giving the team a direct window into the connection between private fairness judgments and public economic preferences.

The headline result is that, on average, the global population is substantially more willing to accept an unequal distribution of wealth when it is based on work rather than on pure chance. Earnings that flow from effort, skill and achievement are widely regarded as deserved, while windfalls produced by the roll of a dice are viewed with far more suspicion and are far more likely to trigger support for redistribution. In other words, inequality is not a single moral category. Two societies with identical levels of income dispersion may judge that dispersion in profoundly different ways depending on whether the rich earned their position or simply got lucky.

Yet this merit-based view of fairness is not universal, and here the study delivers its most provocative findings. The belief that prosperity achieved without personal effort is undeserved is strongest in countries with democratic political systems that are richer, more equal and more individualistic. Switzerland emerges as a paradigmatic case: the Swiss population places exceptional value on achievement through personal effort and is comparatively tolerant of income gaps produced by hard work and performance. At the same time, the Swiss remain open to a degree of redistribution, particularly in cases where inequality is clearly grounded in luck rather than merit. The moral logic seems to be that society should cushion the unlucky but need not penalize the successful.

In sharp contrast, the researchers documented a high level of acceptance of luck in several non-Western countries, with China and India standing out as prominent examples. In these societies, majorities were not only more accepting of prosperity gained by chance; they were also opposed to redistributing wealth that had been acquired through luck. This finding upends the assumption, common in Western economics and political philosophy, that chance-based inequality is morally illegitimate everywhere and that luck should be neutralized through taxation and transfer programs. Almås suggests that cultural and other factors underpin these divergent attitudes, and she indicates that future work will examine to what extent differences in redistributive preferences are associated with different religious beliefs, which may shape whether fortune is seen as a private blessing or a collective concern.

The study also tested an alternative explanation for why people might tolerate inequality even when they find it unfair. Redistribution, after all, is not costless. High earners may be believed to work less when redistributive taxes are in place, shrinking the economic pie and reducing incentives. If such efficiency concerns drive tolerance of inequality, then attitudes should correlate with beliefs about the economic costs of taxation rather than with moral judgments about the source of income. The analysis, however, found that this factor plays a much smaller role in the global acceptance of inequality than the origin of that inequality itself. Luck versus merit, it turns out, is the decisive axis along which people around the world evaluate whether a distribution deserves their approval.

These results carry important methodological lessons for the social sciences. Much of what economists and psychologists claim about human fairness norms has been built on studies of so-called WEIRD populations, that is, Western, educated, industrialized, rich and democratic societies. The findings reveal a significant contrast between Western and non-Western societies, demonstrating that conclusions drawn from Western samples cannot simply be generalized to humanity at large. A person in Zurich and a person in Delhi may look at the same distribution of income and reach opposite moral verdicts, not because one is mistaken about the facts, but because they are drawing on fundamentally different frameworks for justifying economic outcomes.

The practical implications extend well beyond the academy. Debates over progressive taxation, welfare programs and executive compensation are often framed as battles between egalitarians and defenders of the free market, with the underlying assumption that people respond to inequality itself. This research suggests that framing is incomplete. Public support for redistribution is likely to depend on the narrative attached to inequality, whether citizens believe the wealthy earned their position through effort or stumbled into it through inheritance, connections or chance. Policymakers who ignore the moral source of economic disparities may misread public opinion, and campaigns for or against redistribution may succeed or fail based on which account of merit dominates the public conversation.

For Almås and her colleagues, the dataset represents a foundation for a new generation of research on the moral justification of inequality. By covering eighty percent of the world’s population with a consistent experimental protocol, the study offers an unprecedented map of how fairness norms vary across cultures, political systems and levels of economic development. Understanding how societies morally justify inequality, and how those justifications in turn shape attitudes toward redistribution, is essential for anyone seeking to explain why some democracies embrace high taxes and generous welfare states while others resist them. The study does not settle whether luck or merit should matter, but it makes unmistakably clear that, in the court of global public opinion, not all inequality is judged equally, and the verdict differs dramatically depending on where you ask the question.

Subject of Research: Cross-national study of fairness preferences and attitudes toward income inequality and redistribution

Article Title: Luck or merit? Not all inequality is equally acceptable.

Article References: Luck or merit? Not all inequality is equally acceptable.. (n.d.). Original publication

Image Credits: AI Generated

DOI: Not provided

Keywords: inequality, fairness, redistribution, merit, luck, economic preferences, University of Zurich, cross-cultural study, taxation, behavioral economics, Quarterly Journal of Economics, Ingvild Almås