Environmental regulation tools and economic growth

Abstract

Subject. Negative external environmental effects caused by the rapidly increasing global consumption of coal and oil aimed at ensuring economic growth have a detrimental effect on the environment and human society. Countries adopt different approaches to the problem of pollution and the threat of global climate change, which is explained by the specifics of their economies. This article focuses on the environmental regulation tools which stimulate governments and companies to reduce emissions and introduce technologies neutralising negative external factors. Purpose. To determine the most effective environmental policy tool and identify the nature of the correlation between this tool and economic growth. Methodology. In our study, we used general scientific methods for the analysis of economic phenomena, logical analysis, economic analysis, statistical analysis, and the method of empirical observations based on the analysis of statistical data. Results. The study determined that environmental taxes allow for the best internalisation of the consequences of negative external environmental effects. The dependence between this tool and economic growth was determined, and the specific features of this dependence for the Russian economy were identified. Discussion. The obtained results were compared to the conclusions made by experts in external environmental effects and economic growth. Some explanations for the observed dependence between environmental taxes and economic growth were suggested. Conclusions. The results of the study allowed us to determine the advantages and disadvantages of various environmental policy tools. We can conclude that the stimulating effect of environmental taxes as an optimal environmental policy tool on economic growth depends on the initial characteristics of the studied economic system (the initial level of GDP per capita).

Keywords

• economic growth
• external effects
• environmental taxes