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Fiscal and Budgetary Policy Efforts towards Climate Change Mitigation in Romania

Author

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  • Nicoleta Mihaela Florea

    (Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza Street, 200585 Craiova, Romania)

  • Georgeta-Madalina Meghisan-Toma

    (UNESCO Department for Business Administration, Faculty of Business Administration in Foreign Languages, Bucharest University of Economic Studies, 2-10 Caderea Bastiliei, District 1, 010375 Bucharest, Romania
    National Institute of Economic Research “Costin C. Kiritescu”, Romanian Academy, 13 Calea 13 September, 050711 Bucharest, Romania)

  • Silvia Puiu

    (Department of Management, Marketing and Business Administration, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza Street, 200585 Craiova, Romania)

  • Flaviu Meghisan

    (Department of Management and Business Administration, Faculty of Economics and Law, University of Pitesti, 71 Republicii Street, 110014 Pitesti, Romania)

  • Marius Dalian Doran

    (Doctoral School of Economic Sciences, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza Street, 200585 Craiova, Romania)

  • Mariana Niculescu

    (Department of Agricultural and Forestry Technologies, Faculty of Agriculture, University of Craiova, 13 A.I. Cuza Street, 200585 Craiova, Romania)

Abstract

To mitigate the negative effects of climate change on the environment, the Member States of the European Union implement fiscal measures and commit budgetary expenditures to ensure sustainable economic development. Romania, in line with the Union’s objectives, resorted to the application of a system of environmental taxes and provided in the budgetary policy government expenditures for environmental protection. The aim of the research is to highlight the effects of these measures on the environment by analysing the short-run and long-run causal relationships between greenhouse gas emissions, green taxes and government expenditures on environmental protection. Autoregressive Distributed Lag (ARDL) method and Granger causality tests were used to demonstrate the existence of these relationships and the intensity with which they manifest. Following the analysis, we identified a significant long-run influence of government spending on environmental protection on greenhouse gas emissions but also numerous short-run and long-run causal relationships between greenhouse gas emissions and green taxes, applied in Romania. The results of the research consider the impact of public expenses for environment protection, a variable not yet applied for Romania, on greenhouse gas emissions’ decrease, in correlation with environmental taxes per source of origin.

Suggested Citation

  • Nicoleta Mihaela Florea & Georgeta-Madalina Meghisan-Toma & Silvia Puiu & Flaviu Meghisan & Marius Dalian Doran & Mariana Niculescu, 2021. "Fiscal and Budgetary Policy Efforts towards Climate Change Mitigation in Romania," Sustainability, MDPI, vol. 13(5), pages 1-18, March.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:5:p:2802-:d:510978
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    References listed on IDEAS

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    2. Manta, Alina Georgiana & Doran, Nicoleta Mihaela & Bădîrcea, Roxana Maria & Badareu, Gabriela & Țăran, Alexandra Mădălina, 2023. "Does the implementation of a Pigouvian tax be considered an effective approach to address climate change mitigation?," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1719-1731.
    3. Valetin Marian Antohi & Costinela Fortea & Monica Laura Zlati & Romeo-Victor Ionescu & Cristian Mirica, 2022. "Efficiency of financial indicators of the Romanian state budget, an objective of economic security during the epidemiological crisis," Journal of Financial Studies, Institute of Financial Studies, vol. 12(7), pages 38-51, May.
    4. Nicoleta Mihaela Florea & Roxana Maria Bădîrcea & Georgeta-Madalina Meghisan-Toma & Silvia Puiu & Alina Georgiana Manta & Dorel Berceanu, 2021. "Linking Public Finances’ Performance to Renewable-Energy Consumption in Emerging Economies of the European Union," Sustainability, MDPI, vol. 13(11), pages 1-14, June.

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