Paper/Speech Details of Conference Program for the 30th NISPAcee Annual Conference Program Overview WG5: Public Finance and Public Financial Management Author(s) Žiga Kotnik University of Ljubljana Ljubljana Slovenia Title Environmental compliance costs in selected European countries: an alternative approach File Paper files are available only for conference participants, please login first. Presenter Žiga Kotnik Abstract Company faces different internal and external costs in carrying out their activities. Company’s external costs include, inter alia, costs due to the existence of different regulations and related taxes. In the field of environmental protection, the company that cause environmental damage have certain costs, i.e. environmental compliance costs, associated with the existence or introduction of environmental legislation. These costs embrace activities such as time devoted to acquaintance with the requirements of the regulation, preparation and entry of information in the forms, costs of regulatory impact assessments, etc. From company’s perspective, these costs are often excessive and suboptimal. Several methodological approaches can be found in the literature for measuring the costs of environmental regulation. Among the most commonly used are the Standard Cost Model (SCM) that is used world wide, business report data, surveys and interviews, among others. In addition to the existing ones, the costs of environmental regulation can be assessed in other ways. Literature reveals a reasonable assumption that environmental protection expenditure in the industrial sector are positively correlated with the actual companies’ costs of compliance with environmental regulations. In this respect, they can be used as a proxy to properly assess the costs of private sectors, related to environmental regulation obligations. Time series of the estimated environmental protection expenditures in industrial sector in the period 2014–2018 demonstrate an average increase of 0.8 % per time point, with an observed slight increase on average (0.46 %) in the period 2017–2018. Empirical results demonstrate that in 2018 Austria, Belgium, the Czech Republic and Estonia have the highest estimated environmental protection expenditures in industrial sector, ranging from 2.8 % to 1.5 % of GDP. Among the countries with the lowest estimates are Greece, Ireland, Romania and Malta, ranging between 0.1% and 0.3 of GDP.
