Efficiency of environmental taxation in european countries: Comparative analysis

Abstract

Purpose. To make an economic assessment of the effectiveness of the environmental tax system in European countries. The hypothetical question is how and when changes in (increasing or decreasing) the rates of different types of environmental taxes affect the pollution of the environment. Methodology. To evaluate economically the effectiveness of the environmental taxation system, the article uses the method of crosscorrelation between indicators in European countries. findings. The effectiveness of environmental taxes depends on the tax base, tax rates, the evolution of taxes, and tax policy. The design of environmental taxes and their implementation differs across countries within the EU. According to the research conducted, two groups of countries can be distinguished in the EU taking into account polar trends of environmental taxation development. The first group of the countries shows the downward trend in environmental taxes - the annual average of the total environmental tax revenue in these countries today is below its base value in 2008 (Bulgaria, Cyprus, Norway, Luxembourg, Slovenia, Hungary, Croatia, Sweden, Iceland, Malta, Estonia, Latvia, Lithuania). The second group of the countries shows a clear upward trend in environmental taxes ranging (Denmark, Greece, Switzerland, the United Kingdom, Italy, Belgium, Germany, Finland, Spain, the Netherlands, Austria, France, Poland). originality. Depending on the time lag symbol and the direction of crosscorrelation, there are four groups of countries within the environmental policy. The first cluster includes countries in which environmental policy instruments such as air pollution fees and resource use charges are quite effective (Poland, Slovakia, Slovenia, Estonia). The second cluster includes countries in which the environmental tax increase was accompanied by an increase in CO2 emissions (Belgium, the Czech Republic, Finland, Hungary). In the third group of countries deterioration of the environmental situation is not a motivator for increasing the environmental taxation burden (Lithuania, Greece). The fourth cluster demonstrates that deterioration of the environmental situation in the country motivates to increase the environmental taxation burden (Bulgaria, Spain). Practical value. The data obtained indirectly indicate that the dependencies between the time series we investigated are likely to be nonlinear in nature, which the found crosscorrelation coefficients cannot detect. The research demonstrates the high probability of the existence of diametrically opposite interdependencies between the studied variables for different groups of countries.