Environmental tax revenues in Europe: structural estimation models

Environmental problems mitigation and the transition towards a greener economy with the objective of becoming climate neutral is made possible through environmental regulations. Environmental taxes can be considered one of the best instruments needed when elaborating and implementing environmental protection policies, especially because they act as vectors of change that can ensure achieving the sustainable development goals. On the other hand, greenhouse gas emissions in the atmosphere rose to new records in 2019 and act as obstacles in becoming climate neutral and achieving the Goal 13 of sustainable development, the latter addressing the urgent need to adopt measures meant to combat climate change and its impact, therefore measures designed to de-carbonize economic activities, especially in countries with higher emissions of greenhouse gases. In this context, the main objective undertook in this research paper was to estimate the amount of environmental tax revenues based on the greenhouse gas emissions in the case of EU members plus Iceland, Norway and Switzerland. Results highlight strong correlations and statistically significant between the amount of greenhouse gas emissions and two types of environmental tax revenues: energy and transport. The linear cross–sectional econometric methodology (least-squares method) was applied to the data referring to the year 2018. However, results point to the fact that the only valid econometric model constructed is the one estimating the transport environmental tax revenues based on the levels of greenhouse gas emissions.