Public environmental expenditures in time of crisis in Estonia.Eesti avaliku sektori keskkonnakulutused majanduskriisi perioodil

Abstract

The purpose of this paper is to study the impact from the recent financial crisis on public environmental expenditure in Estonia. The data show different tendencies depending on the level of government. While the recent financial crisis has affected Local Government spending on environmental protection negatively, Central Government environmental protection expenditure increased by more than 30 percent between 2007 and 2008. Preliminary data indicate that this tendency continued in 2009. When comparing expenditures on environmental protection during times of crisis it is possible to detect differences between the developments in 1998-1999 and those in 2007-2008. Public expenditures on environmental protection were much more sensitive to declining GDP during the previous financial crisis than during the recent crisis. In the 2000s two important changes have affected environmental funding in Estonia. Accession to the EU in 2004 has made EU funding available for environmental protection. The ecological tax reform introduced in 2005 has increased the revenues of environmental charges earmarked for environmental purposes