Participation of environmental taxes in government expenditures for environmental protection: the case of selected EU countries

Abstract

The aim of this paper is to show whether the current system of environmental taxation and environmental policies of the states is efficient for solving environmental problems. We analyze the link between environmental tax revenues and total government expenditure as independent variables and government expenditures for environmental protection as dependent variable in selected EU countries. By the implementation of panel data regression analysis on a defined sample, we came to the conclusion that among the observed variables there is a positive relationship. However, this relationship shows that the growth of expenditures for environmental protection is slower than the growth of total expenditure. The results also suggest that the relationship between revenues from environmental taxes and expenditures of the state in the area of environmental protection is a little weaker. With respect to the result of analysis, it can be concluded that the existing state policy in is not sufficiently effective.

Keywords

• environmental taxes, the environment, government spending, ecological tax reform, earnmarked revenues