ASSESSMENT OF THE EFFECTIVENESS OF PUBLIC POLICIES TO ACHIEVE CARBON NEUTRALITY IN EUROPEAN COUNTRIES
Abstract
At the current stage, the intensification of economic growth, anthropogenic impact lead to environmental problems, affecting the state of atmosphere by an increase in carbon dioxide (CO2) emissions. The climate agenda acquires priority status in the context of governments. The aim of the study is to assess the degree of effectiveness of government action to achieve carbon neutrality in European countries through economic policy measures. A theoretical review shows that there are synergies between economic instruments, while relatively few works analyze both direct and indirect public policy instruments to reduce emissions. The hypothesis of the study is that existing carbon pricing practices have a meaningful impact on reducing carbon dioxide emissions, along with indirect instruments: tax on polluting industries, investments in projects. To assess the quality of climate policy, we use panel data from 27 European Union member states from 1997 to 2020. We calculate the CO2 emission intensity per monetary unit of output as the dependent variable. Explanatory variables include public policy indicators, taking into account both direct effects on carbon emissions and indirect effects on energy-intensive economic sectors and overall environmental improvement. Quantitative estimates are made using an econometric model of panel data with fixed effects. The results show the decisive importance of government actions in the process of reducing the pollution. In addition, general regulation instruments are found to have a greater impact due to their wide coverage. Thus, the results of the study can be useful for the development of environmental policies.
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