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Ecological Fiscal Transfers in Europe – Evidence-Based Design Options for a Transnational Scheme

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  • Droste, N.
  • Ring, I.
  • Santos, R.
  • Kettunen, M.

Abstract

Ecological Fiscal Transfers (EFT) have recently gained attention as a promising instrument addressing public authorities to provide incentives for nature conservation. In parallel, both the EU and various European countries are exploring new mechanisms to mobilise funding to support biodiversity conservation. We develop a proposal for an EFT design within the supranational context of the EU and assess its potential effects with evidence-based estimates. We i) provide both a theoretical underpinning and a synthesis of the current EFT schemes and EU Nature Directives, ii) propose a model for EFT implementation within the existing EU funding mechanisms based on quantitative and qualitative conservation indicators, iii) analyse how resulting payments would be (spatially) distributed among European regions, and iv) discuss the model outcomes in terms of ecological effectiveness, distributive effects and cost-effectiveness. We thereby contribute to the debate about how to better integrate ecological public functions within multi-level and supra-national governance structures.

Suggested Citation

  • Droste, N. & Ring, I. & Santos, R. & Kettunen, M., 2018. "Ecological Fiscal Transfers in Europe – Evidence-Based Design Options for a Transnational Scheme," Ecological Economics, Elsevier, vol. 147(C), pages 373-382.
    • Handle: RePEc:eee:ecolec:v:147:y:2018:i:c:p:373-382
    DOI: 10.1016/j.ecolecon.2018.01.031
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    3. Rocha, Samuel José Silva Soares da & Comini, Indira Bifano & Morais Júnior, Vicente Toledo Machado de & Schettini, Bruno Leão Said & Villanova, Paulo Henrique & Alves, Eliana Boaventura Bernardes Mour, 2020. "Ecological ICMS enables forest restoration in Brazil," Land Use Policy, Elsevier, vol. 91(C).
    4. Chen, Gao & Xu, Jian & Qi, Yu, 2022. "Environmental (de)centralization and local environmental governance: Evidence from a natural experiment in China," China Economic Review, Elsevier, vol. 72(C).
    5. Weixiang Zhao & Yankun Xu, 2022. "Public Expenditure and Green Total Factor Productivity: Evidence from Chinese Prefecture-Level Cities," IJERPH, MDPI, vol. 19(9), pages 1-27, May.
    6. Cheng, Yuhong & Ma, Ben & Sun, Yidan, 2023. "Does central ecological transfer payment enhance local environmental performance? Quasi-experimental evidence from China," Ecological Economics, Elsevier, vol. 212(C).
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    9. Ruggiero, P.G.C. & Pfaff, A. & Pereda, P. & Nichols, E. & Metzger, J.P., 2022. "The Brazilian intergovernmental fiscal transfer for conservation: A successful but self-limiting incentive program," Ecological Economics, Elsevier, vol. 191(C).
    10. Xin Yang & Fan Zhang & Cheng Luo & Anlu Zhang, 2019. "Farmland Ecological Compensation Zoning and Horizontal Fiscal Payment Mechanism in Wuhan Agglomeration, China, From the Perspective of Ecological Footprint," Sustainability, MDPI, vol. 11(8), pages 1-15, April.
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    More about this item

    Keywords

    Ecological Fiscal Transfers; European Union; Natura 2000 network; Biodiversity conservation funding; Policy advice; Spatial econometrics;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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