Relationship between GDP and Government Expenditure on Environmental Protection and Environmental Tax Revenues

the environment and improve its quality, which affects many industry
sectors (such as mining, energy, transport and many others). But at
the same time, it aims to achieve economic growth. The paper links
these two ambitions of the EU. The paper aims to examine the
relationship between the GDP and two environmental indicators,
namely the government expenditure on environmental protection and
the environmental tax revenues in the EU countries. The research
uses freely available Eurostat database data and relativizes them by
per capita conversion for comparability. Descriptive statistics and
fixed effect panel regression models are used in the evaluation. All
data for all EU countries from 2014 onwards are evaluated. The
results showed that the level of GDP per capita in the European Union
countries could be affected by government expenditure on
environmental protection per capita (positive relationship validated)
and environmental tax revenues per capita (positive relationship
validated). The paper presents political implications in two
dimensions. The one follows from the double positive effect of
government expenditure on environmental protection – contribution
to environmental sustainability and economic growth. The second
one calls for caution in decision-making by the public authorities
based on the interpretation of the positive relationship of
environmental tax revenues since their growth may be accompanied
by an increase in undesirable activities associated with threats to
environmental sustainability.