Environmental Tax Policy Research Articles

Effects of different types of environmental taxes on energy–water nexus

Abstract Energy and water are closely related resources, so environmental tax policies for energy resources will also influence the use of water resources. Different environmental tax policies have different emphases. However, few research has compared their effects on the energy–water nexus. In the present study, we considered two commonly used environmental tax policies to regulate energy use (energy and carbon taxes), and established a dynamic computable general equilibrium model to compare the comprehensive impacts of different tax types and intensities on the energy–water nexus. In addition to the direct-use nexus (direct water and energy consumption), we also considered the embodied-use nexus (energy-related water consumption and water-related energy consumption) and the hybrid-use nexus (hybrid water and energy consumption). Besides, both the effects of tax rates and time spans are simulated simultaneously. China was adopted as a case study. For the direct-use nexus, both taxes would increase the proportion of direct water consumption versus direct energy consumption. The average differences in the proportion change rates between the two taxes were 3.8, 7.8, and 9.7% for the low, medium, and high tax intensities, respectively. For the embodied-use nexus, the carbon tax could increase the proportion of energy-related water consumption versus water-related energy consumption. The average differences in the proportion change rates between the two taxes were 4.4, 8.4, and 10.2% for the low, medium, and high tax intensities, respectively. For the hybrid-use nexus, the effects of the taxes were similar to those for the direct-use nexus.

Environmental policy in the countries of the world in the conditions of development of ecologically conscious society

The article considers the current trends of environmental tax reform in the world. The main types of fiscal policy instruments in the countries of the European Union, the USA, Great Britain and others are analyzed. Indicators of changes in greenhouse gas emissions as a result of environmental tax policy in the world are presented. There is currently a clear trend in the world to change environmental taxation, in particular raising environmental tax rates and introducing new types of environmental taxation. Given the European vector of foreign economic policy, Ukraine should develop mechanisms and tools for environmental taxation, taking into account EU requirements and norms. It is important that the increase in environmental tax rates and the introduction of new types of taxes, fees or quotas is integrated with the use of economic instruments to protect and stimulate the development of domestic enterprises, so that increasing tax payments do not reduce their competitiveness or quality of goods and services. The adopted European Green Investment Plan (EGDIP), or the Sustainable Europe Investment Plan (SEIP) is analyzed in the article as the investment basis for The Green Deal. Under a new law agreed between the member states and the EU Parliament, the European Union is committed to reducing carbon emissions by at least 55% by 2030 compared to 1990 levels. For Ukraine, as a neighboring EU country that has signed an Association Agreement with the EU, the Carbon Border Adjustment Mechanism (CBAM) is important. This is one of the key initiatives to achieve the goals of the European Green Deal. Its main purpose is to prevent carbon leakage by creating a level playing field for EU producers in imports of electricity, cement, aluminium, fertilizer as well as iron and steel products, as specified in the annex. The CBAM will be implemented in 2026, following a transition period of three years characterized by data collection only. The priority directions of development of ecological policy for Ukraine in the conditions of European integration are defined. It is also advisable to clearly define the directions and purposes of using revenues from environmental taxes and fees in local and state budgets.

Formation of the incentive role of the environmental tax in Ukraine

Purpose. Developing trends for increasing the effectiveness of environmental tax as an institutional means of environmental protection and optimization of the tax burden. Methodology. A set of scientific methods and approaches was used in the research, which provided an opportunity to form a conceptually integrated scientific work. For this purpose, the following was used: content analysis method to study the regulatory framework of the environmental tax; abstract-logical approach to analyze the differences between the revenues of the environmental tax to the budget and the amount of funds planned and funds spent on environmental protection; integrated system approach to compare environmental taxation in the European Union and Ukraine; method of logical generalization to make proposals on how to increase the efficiency of the environmental tax, optimize the tax burden and align with Ukraines international obligations. Findings. A comparative analysis of environmental taxation in the European Union and Ukraine is conducted. The existing differences by types of environmental tax, the share of these types in the total amount of environmental tax and the purpose of environmental taxation in European countries and Ukraine are indicated. The dynamics of ecological tax revenues to the State budget and budget expenditures for environmental protection is studied. Trends in the dynamics of taxation, in particular, in creating a gap between revenues and expenditures are established. There is a tendency to form a significant gap in the amounts of environmental tax paid by enterprises. It is stated that only ten enterprises pay more than half of the countrys environmental tax. Originality. The necessity of formation of the role of ecological taxes stimulating preservation of the environment is pointed out and particular directions of formation of such incentives are offered. Proposals for environmental tax policy have been developed. It is stated that the increase in the environmental tax should be consistent with the overall tax burden per capita. Increasing the environmental tax also requires a preliminary detailed analysis of how the impact of its increase will affect each large enterprise and industry and determination of approaches to increasing the environmental tax differentiated according to transparent principles. Practical value. Recommendations are provided on how to increase the efficiency of the environmental tax as an institutional means of environmental protection, specific steps are proposed to optimize the tax burden and promote the norms approved by the Paris Climate Agreement and the Association Agreement with the EU.

Accounting of Environmental Protection Tax on Taxable Air Pollutants in the Process of Coal Storage, Loading, and Unloading at the Port

Hao, C.; Ge, C.; Ren, J.; Dong, Z.; Hu, R.; Li, R.; Yan, Y.; Zhou, Q.; Peng, C., and Qu, A., 2020. Accounting of environmental protection tax on taxable air pollutants in the process of coal storage, loading and unloading at the port. In: Liu, X. and Zhao, L. (eds.), Today's Modern Coastal Society: Technical and Sociological Aspects of Coastal Research. Journal of Coastal Research, Special Issue No. 111, pp. 151–155. Coconut Creek (Florida), ISSN 0749-0208.The Environmental Protection Tax Law of China came into force in 2018, and China has entered a new stage where tax leverage is adopted to guide pollutant discharge units to reduce emissions. It is in this context that this article discusses the current implementation and challenges with regard to tax amount formulation, tax collection and management, and the tax system. The article takes the particulate pollution caused by coal storage, loading, and unloading as an example to discuss research progress in the accounting methods for main particulate emissions at home and abroad, evaluate the advantages and disadvantages of the existing emissions accounting methods, and make proposals for improving the environmental tax system, strengthening cross department cooperation and improving the system for disclosure of self-monitoring information, so as to promote the smooth implementation of environmental protection tax policy in our country.

CGE modeling with disaggregated pollution treatment sectors for assessing China's environmental tax policies

This research involved constructing a computable general equilibrium (CGE) model for assessing China's latest environmental tax policies. Most environmental CGE models link pollutant emissions to the standard CGE model only by pollution coefficients per unit of sectoral output, and the emission reduction process is not included within production structures. We constructed separate pollution treatment sectors for solid waste management, wastewater management, and waste gas management to describe the pollution treatment processes and identify how policies affect production activities. We compiled the satellite accounts of 18 pollutants from the China Environmentally Extended Input-Output (CEEIO) dataset covering primary gas, water, and solid pollutants and disaggregated the electricity sector into six different production technologies: hydroelectricity, coal power, gas electricity, oil electricity, nuclear power, and renewable energies. We drew two primary conclusions from the simulation results. First, the environmental policies examined could help reduce the emissions of most kinds of pollutants, but also negatively affect GDP. GDP loss by 2030 would be 0.03% in the low environmental tax scenario (LowET), 0.06% in the high environmental tax scenario (HighET), 0.16% in the low environmental tax and low carbon tax scenario (LowETC), and 0.34% in the high environmental tax and high carbon tax scenario (HighETC). SO2 emissions would decrease by 17.4%, 21.0%, 19.3% and 24.5%, respectively, and CO2 emissions would reduce by 0.9%, 1.7%, 5.8% and 11.0%. Second, despite the minor changes in the economic impacts, the effectiveness in pollution treatment of environmental tax policies is underestimated if the pollution treatment sectors are disaggregated in the CGE model. Take the SO2 for an example. The calculated SO2 reductions will increase from 8.95% to 24.46% after disaggregating the pollution treatment sectors in HighETC scenarios.

Decision and coordination of a low-carbon supply chain considering environmental tax policy on consumers

PurposeThis paper aims to explore how upstream supply chain companies will control the carbon emissions and price decisions of products when the government implements environmental tax policy on consumers. It provides some suggestions to control carbon emissions for the government and manufacturers.Design/methodology/approachThis study establishes two-echelon Stackelberg game models with and without the implementation of environmental tax policy on consumers in a centralized scenario and a decentralized scenario. Through the comparative analysis of the four models, the optimal emission abatement and pricing strategies are obtained.FindingsThis paper concludes that implementing environmental tax policy on consumers within the market’s acceptable range is more beneficial to the retailer and the environment, as well as the overall social welfare, except for the manufacturer. Moreover, consumer’s low-carbon preference always has a broader impact on carbon abatement and corporate profits than environmental tax coefficient. Finally, the side-payment self-executing contract can effectively ensure that the supply chain members make rational decisions spontaneously while achieving a win-win solution of centralized scenario.Originality/valueThis paper first considers how the government’s environmental tax policy on consumers will affect the decision-making of supply chain companies, and proposes an improved side-payment self-enforcing contract to maximize environmental and economic benefits of centralized scenario. In addition, it provides a reference for the government to adopt both the carbon cap policy and the environmental tax policy.

PERSEPSI MASYARAKAT TERHADAP ISU PAJAK LINGKUNGAN DI KABUPATEN KEPULAUAN SIAU TAGULANDANG BIARO (SITARO)

This study aims to enrich the literature on public policy, especially tax policy environment is important to protect the natural kseimbangan and to contribute to the government about how this environmental tax policy should be implemented in the future with regard to the interests of local communities are far remote.This study used a qualitative approach to the sources of data used are primary data in the form of interviews with stakeholders, such as governments, small businesses, and the general public and secondary data such as library materials, such as laws and regulations on environmental taxes. Objects in this study is Sitaro Islands Regency (Sitaro).The results of this study indicate that the level of awareness of the various parties in Sitaro Islands District is still lacking; There are three areas that must be considered government in formulating tax policy environment that is the process of establishing an environmental tax policy, the imposition of environmental tax rate basis and management of environmental taxes; Environmental taxes can serve as regulatory functions and functions budgetair; Public perceptions of the environmental tax is the first goal for the interest in protecting the environment from pollution and the second is to increase government revenue; The local government is considered more appropriate in determining the environmental tax policy than the central government since the area is more aware of the conditions of their respective regions; Environmental taxes can be applied as long as proportionally; Sitaro Islands District which is a remote area already requires an environmental tax for air pollution that is currently underway and is used to protect the local ecosystem.

Modelling the effects of energy taxes on ecological footprint transfers in China's foreign trade

Significant inter-country transfers of ecological footprint are embodied in foreign trade. Previous research on these transfers mainly focused on historical characteristics of the flows based on historical data. However, the transfers of ecological footprints in foreign trade are dynamic and are influenced by environmental tax policies, whose future impacts have seldom been considered. In the present study, we explored the effects of an energy tax, a common form of environmental tax, on these transfers. We combined a multi-sector dynamic computable general equilibrium model with ecological footprint assessment, and analyzed the changes in the actual and virtual land uses that comprise the ecological footprint under different tax intensities. We used China as a case study to analyze the energy tax's effects. For the actual land use component of the ecological footprint, the energy tax increased the export of ecological footprint but decreased its import, and China's average net exports (exports minus imports) decreased by 4.56 × 106 gha (global hectares) and 10.81 × 106 gha from 2015 to 2020 under the low and high tax intensities, respectively. For the virtual land use component of the ecological footprint, the energy tax simultaneously decreased export and import of this footprint component; the average net import would increase by 3.84 × 106 gha and 8.91 × 106 gha. For the total ecological footprint, the energy tax also simultaneously reduced export and import, with the net import decreasing by 1.76 × 106 gha and 4.45 × 106 gha under the low and high taxes, respectively.

SEÇİLMİŞ OECD ÜLKELERİNDE ÇEVRE VERGİLERİNİN ÇEVRE KİRLİLİĞİ ÜZERİNDEKİ ETKİLERİ: YAPISAL KIRILMALI NEDENSELLİK TESTİNDEN KANITLAR

Bu çalışmada seçilmiş OECD ülkeleri için 1995-2016 döneminde çevre vergisi gelirlerinin çevre kirliliği üzerindeki etkileri incelenmiştir. Çalışmada çevre kirliliğini temsilen son zamanlarda kullanılmaya başlanan ekolojik ayak izi değişkeni kullanılmıştır. Ampirik analizin ilk bölümünde değişkenlerin durağanlık dereceleri Augmented Dickey-Fuller (ADF) ve Fourier ADF olmak üzere iki farklı birim kök testi ile incelenmiştir. İkinci bölümde, nedensellik sonuçlarını karşılaştırmak için geleneksel nedensellik testlerinden Granger, Sims ve Geweke nedensellik testleri ve yumuşak yapısal kırılmalı yeni Fourier Granger nedensellik testi uygulanmıştır. Çalışmadan elde edilen sonuçlara göre Hollanda ve İtalya için çevre vergisi gelirlerinden ekolojik ayak izine doğru tek yönlü bir nedensellik tespit edilmiştir. Portekiz için ise nedenselliğin yönü ekolojik ayak izinden çevre vergisi gelirlerine doğrudur. Diğer taraftan, İngiltere için değişkenler arasında çift yönlü nedensellik tespit edilmiştir. Çalışmanın sonuçlarının çevre kirliliği ve çevre vergisi politikalarının belirlenmesinde politika yapıcılara yol gösterici olması beklenmektedir.

Analysis of the Social Welfare Effect of Environmental Regulation Policy Based on a Market Structure Perspective and Consumer

With the implementation of regulatory policies, some new problems are emerging, such as uneven governance effects, large differences in economic growth, and social welfare inequalities. In order to promote the sustainable development of both the economy and the environment, it is necessary to provide theoretical explanations for the above phenomena. Thus, this paper constructs a theoretical model of social welfare effects based on the Cournot model. Additionally, the scenario analysis method is used to analyze the social welfare effects of environmental control policies from the perspective of market structure and consumer preferences. The findings of the scenario analysis are as follows: (1) the social welfare effect of environmental subsidy policy is greater than the social welfare effect of environmental tax policy when the absolute difference between the external value of environmentally friendly goods and non-environmental goods is less than 7.4 units and (2) the implementation of environmental subsidy policies or environmental tax policies will improve social welfare when the market structure is a completely competitive market and when both of the externalities of environmentally friendly commodities and non-environmental commodities are not the same at intervals (0, 0.335) and (−0.335, 0). We conclude that (1) the government should consider externalities, market powers, and consumer preferences when implementing environmental regulation policies and (2) the government can achieve a trend toward the development of environmentally friendly goods by guiding consumer preferences and harnessing market power.

How do Fuel Taxes Impact Rebound Effect? Empirical Evidence from French Households

L’amélioration de l’efficacité énergétique est un moyen utilisé pour tenter de limiter la consommation d’énergie. Mais cette politique peut avoir des effets pervers. Quand la performance énergétique d’un équipement est améliorée, le coût de ce service diminue pour le consommateur, ce qui l’incite à consommer une quantité plus importante de ce service. L’ampleur de cet effet, nommé effet rebond, est sujette à débat. Nous estimons cet effet à partir de données individuelles de ménages français. Nous montrons que l’effet rebond est dépendant des caractéristiques du ménage (niveau de revenu, localisation géographique). Nous utilisons des estimations économétriques pour simuler des politiques de fiscalité environnementale.

Exploring the Impact of EU Law on Energy and Environmental Taxation

This chapter shows that EU law has shaped – and continues to shape – the development of environmental tax measures at both EU and Member State level. Firstly, at the EU level, the EU’s institutional framework has actually inhibited the harmonisation of environmentally-driven taxes. An analysis of the historical development of EU provisions surrounding energy taxation illustrates this point (sections 2.1. & 2.2). So far, the energy taxation directive remains largely disconnected from the EU’s climate policy, including the EU Emissions Trading Scheme (section 2.3). Secondly, EU substantive law has had an ambiguous impact on Member States’ environmental tax policy (section 3). On the one hand, EU substantive law has been interpreted by the EU Court of Justice in a way that encourages Member States to adopt environmental tax measures that are environmentally-driven and structured accordingly. Indeed, the environmental purpose of Member States’ tax measures seems to play a positive role in the assessment of their compatibility with EU law, including State aid provisions (section 3.1), the fundamental freedoms (section 3.2) and the energy taxation directive (section 3.3). On the other hand, in some instances, EU law strictly limits Member States’ ability to adopt environmentally-driven tax measures. Moreover, EU secondary law disregards the purpose of environmental taxes in order to classify them for statistical purposes (section 3.4). The broad picture that emerges from the analysis of existing legislation, case-law and literature highlights that institutional and substantive EU law has shaped the use of environmental tax measures in a way that does not ensure the alignment of these taxes with the EU’s and Member States’ environmental and climate ambitions. Therefore, the last section of this chapter suggests new areas of research, which could improve the consistency of environmental tax policy at both EU and Member State levels (section 4).

A cost–benefit analysis of the environmental taxation policy in China: A frontier analysis‐based environmentally extended input–output optimization method

AbstractChina's high‐speed economic development and reliance on overconsumption of natural resources have led to serious environmental pollution. Environmental taxation is seen as an effective economic tool to help mitigate air pollution. In order to assess the effects of different scenarios of environmental taxation policies, we propose a frontier‐based environmentally extended input–output optimization model with explicit emission abatement sectors to reflect the inputs and benefits of abatement. Frontier analysis ensures policy scenarios are assessed under the same technical efficiency benchmark, while input–output analysis depicts the wide range of economic transactions among sectors of an economy. Four scenarios are considered in this study, which are increasing specific tax rates of SO2, NOx, and soot and dust separately and increasing all three tax rates simultaneously. Our estimation results show that: raising tax rates of SO2, NOx, and soot and dust simultaneously would have the highest emission reduction effects, with the SO2 tax rate making the greatest contribution to emission reduction. Raising the soot and dust tax rate is the most environmentally friendly strategy due to its highest abatement to welfare through avoided health costs. The combination of frontier analysis and input–output analysis provides policy makers a comprehensive and sectoral approach to assess costs and benefits of environmental taxation.

Environmental policy and ‘double dividend’ in a transitional economy

Although the environmental benefit from implementing a climate tax is usually realized, the economic dividend still remains a controversial issue warranting further research. This is because the impact of an environmental policy on an economy-wide system will depend on factors that differ from one region to the next. In this paper, we develop a static CGE model for Liberia that is capable of analyzing both a uniform and a partial carbon tax policy. Under the uniform policy instituted to ensure mitigation in the range of 20–50%, an economic dividend is found for energy, employment, and welfare. In particular, energy consumption increases by between 5 and 15.5%, respectively. Interestingly, under a second best policy which exempts economically strategic sectors from the tax, no economic dividend is found for all three variables. This time, energy use declines by between 2 and 9%. These suggest that a uniform environmental tax policy is a more viable option for Liberia, in particular, as it does not only generate economic dividend for employment and welfare, it also incentivizes Liberia's adoption and use of renewable energy technologies. In general, based on the results obtained, further conditions for the feasibility of a double dividend are proposed.

Can Environmental Tax Policy Really Help to Reduce Pollutant Emissions? An Empirical Study of a Panel ARDL Model Based on OECD Countries and China

Under the background that environmental tax has increasingly become the main means of environmental governance in various countries, it is particularly important to study the effect of environmental tax on reducing pollutants and then put forward suggestions for building a scientific and rational environmental tax system. The novelty of this paper is the investigation of the pollutant emission reduction effects of environmental taxes in Organization for Economic Cooperation and Development (OECD) countries and Chinese provinces at the same time, and further comparison of the pollutant emission reduction effects of environmental taxes in OECD and China under different environmental tax collection scales, industrial added value levels, and economic development conditions based on Auto-Regressive Distributed Lag Modelling Approach (ARDL). The data are derived from environmental taxes and pollutants of OECD countries from 1994 to 2016 and Chinese provinces from 2004 to 2016. The results show that from the overall regression results, environmental taxes really help to reduce pollutant emissions, both in OECD countries and China. From the grouping regression results, the OECD countries and Chinese inland provinces with small-scale or medium-level of environmental tax revenue and higher level of economic growth all show better emission reduction effects, while OECD countries with low industrial added value and Chinese inland provinces with high industrial added value have more significant effects on pollutant emission reduction via environmental taxes.

Does Environmental Tax Affect Energy Efficiency? An Empirical Study of Energy Efficiency in OECD Countries Based on DEA and Logit Model

OECD countries are the largest energy consuming economies in the world, improving energy efficiency and reducing pollution emissions is one of the important goals of the environmental tax policies of OECD countries. Based on the total factor energy efficiency index, this paper establishes an epsilon based measure-data envelopment analysis (EBM-DEA) model to measure the energy efficiency levels of 32 OECD countries during 1995–2016 when undesired outputs are included and not included. The effect of environmental factors on energy efficiency evaluation is compared by efficiency analysis and projection value analysis. On this basis, a Panel Logit model was established to empirically examine the impact of energy taxes on energy efficiency in 32 OECD countries. This paper finds that undesired output has a large impact on the energy efficiency level of OECD countries. Measuring energy efficiency levels without considering undesired outputs tends to lead to overestimation of the energy efficiency level of environmentally friendly countries and underestimate the energy efficiency level of countries that value environmental protection. The collection of energy tax has an important impact on energy consumption efficiency. Without considering the unexpected output, the energy tax has a significant impact on improving the efficiency of coal energy consumption. When considering the unexpected output, the energy tax has a significant impact on improving the efficiency of oil energy consumption. Regardless of the expected output or not, the energy tax has a positive effect on improving the efficiency of natural gas energy consumption. The experimental results also show that the energy structure and energy price have a negative impact on energy efficiency, while the progress of environmental protection technology and industrial structure have a positive impact on energy efficiency. Energy taxes have a “double dividend”. This paper argues that when evaluating a country’s energy efficiency, it should consider the undesired output factors of environmental constraints; governments should pay attention to the role of energy taxes in improving energy efficiency, improve the energy tax system, optimize industrial structure upgrades, stabilize energy prices and support the development of environmental technologies and improve energy efficiency.

Environmental Tax Policy and R&D Innovation Networks

We examine the role of an environmental tax on R&D collaboration networks between firms in the context of developing cleaner production processes. First, we show that three types of innovation networks can emerge in equilibrium. Then, we examine the relationship between the environmental tax and the incentives for firms to add more collaborative links. We show that an increase in the environmental tax does not always incentivize firms to increase the number of R&D collaborations. Finally, we examine the optimal tax that the public authorities should set in order to maximize the social welfare. Given tractability issues, for this problem, we restrict our attention to the case of three firms. We establish that the optimal environmental tax depends on the cost of link formation. The higher the cost of link formation, the lower is the environmental tax. Similarly, we observe that the optimal environmental tax increases with the number of links that an efficient network contains.

Disability insurance and environmental tax policy in a zero net emissions society

ABSTRACTThis study aims to show the importance of disability insurance from an environmental policy perspective. Within the framework of an overlapping generations model, we derive the emissions tax rate required to achieve zero net pollution. Our model implies that the emissions tax rate is always lower in the presence of disability insurance than it is in the absence of disability insurance. The results suggest that disability insurance can be used as an instrument for increasing gross domestic product performance when the government implements a zero net emissions policy.

Fiscal and taxation policies, economic growth and environmental quality: An analysis based on PVAR model

Taking the investment in environmental pollution control as the representative of the environmental fiscal policy, taking sewage charge as the representative of the environmental tax policy, using the provincial panel data of China from 2003 to 2015, this paper uses the PVAR model to test the interaction relationship among China’s fiscal and taxation policies, economic growth and environmental quality. The results show that there is a long-term interaction among environmental pollution control investment, sewage charge, economic growth and environmental quality, and the variance decomposition results show the contribution degrees of pollution control investment to the industrial “three wastes” emission intensity are 0.6 percent, 46.6 percent and 11.7 percent. The contribution degrees of sewage charge to the industrial “three wastes” emission intensity are 15.5 percent, 70.9 percent and 8.3 percent in turn. The contribution degrees of the economic development level to the industrial “three wastes” emission intensity are 2.5 percent, 7.1 percent and 0.5 percent in turn. The internal mechanism that investment in environmental pollution control and sewage charge first affect economic development and then indirectly affect environmental quality is set up. On this basis, this paper puts forward policy proposals on how to enhance the positive interaction among fiscal and taxation policies, economic growth and environmental quality.

ENVIRONMENTAL TAXION TRENDS IN EUROPE

Introduction. EU countries are showing an increasing trend towards the priority of the public good “clean ecology”. Environmental taxation not only exerts fiscal, but above all, corrective influence on the behavior of economic agents. Nonetheless, the fiscal design of environmental taxes and their composition as a source of budget revenue remains an issue that needs further study. Purpose is to track current environmental tax trends in Europe, the evolution of environmental policy instruments in EU countries, to analyze their economic and social impact; to identify problems with the existing environmental taxation system in Ukraine. Methods. In researching current environmental tax trends in Europe, identifying the stages of evolution of environmental policy instruments, analyzing their impact on the economy and social sphere, substantiating the problems of the existing system of environmental taxation in Ukraine, a number of scientific and special methods of research were used, in particular: analysis, synthesis, induction, deduction, abstraction, generalization, statistical, graphic, tabular. Results. Based on the analysis of the dynamics of different types of environmental taxes in the EU-28 countries for the period 1995–2017 (gross, energy, transport, pollution taxes, resources), a general tendency for their increase was revealed. In a comparative analysis of growth dynamics of total environmental taxes (TET), taxes on CO2 and greenhouse gases in the same sample of countries during the study period, a tendency was found to exceed the growth rate of TET over the reducing harmful emissions, which confirms the implementation of environmental taxes fiscal function, than corrective one. It has been stated that, despite the coherence and systematic nature of European countries' environmental tax policy, compensating for “environmental losses” indirectly increases its sensitivity to public sector efficiency and breaks the link between environmental taxation and the public good “clean ecology”. At the same time, problems were identified in the field of environmental taxation in Ukraine, in particular to the lack of an effective model of taxation, due to the inconsistency of the revenue mechanisms and proportions of the distribution of environmental taxes between budgets of different levels. Conclusions. Further research suggests focusing on assessing efficiency level of the environmental tax system in European countries, which will create the basis for improving the latter in Ukraine.