Environmental Tax Revenue in the European Union: Composition, Convergence and the Limits of a Revenue-Based Indicator, 2000–2023
Received: 2026-07-29
Accepted: 2026-09-30
Published: 2026-09-30
DOI: 10.67276/cfgwklzkbf
Volume: Year XXI, No. 73 Supplement (Conference Proceedings), August 2026
Pages: 76-94
Authors
- Dinu Octavian NICOLESCU — Valahia University of Targoviste, Targoviste, Romania
Abstract
Environmental tax revenue expressed as a share of gross domestic product is the indicator most often used to compare the environmental fiscal effort of European Union member states. This paper asks what the indicator shows once it is decomposed into its energy, transport and pollution components. Using a balanced panel of the 27 member states over 2000–2023, we apply the two standard convergence tests, a regression of average growth on the initial level and a trend fitted to the annual coefficient of variation, to the aggregate and to each component. The aggregate declined from a cross-country mean of 2.729 to 2.259 per cent of gross domestic product, while the average national share of energy taxes rose from 71.6 to 77.6 per cent and that of transport taxes fell from 23.4 to 17.5 per cent. The growth regression yields a coefficient of -0.0414 (p = 0.005) and an implied half-life of 5.3 years, yet the coefficient of variation rose by 40.2 per cent. The two results are compatible: the regression detects mean reversion in a noisy series, and inferring a narrowing distribution from it would be the regression fallacy. The widening is concentrated in energy taxes, while transport taxes converged. Romania fell from 3.396 to 2.589 per cent of gross domestic product, still eighth in the Union and in the upper third of the distribution, with 94.9 per cent of its receipts raised on energy. Aggregate comparisons hide the structural narrowness that matters most for policy design.
Keywords: regression fallacy; cross-country dispersion; energy levies; fiscal structure; Romania
Cite this article
APA: Dinu Octavian NICOLESCU (2026). Environmental Tax Revenue in the European Union: Composition, Convergence and the Limits of a Revenue-Based Indicator, 2000–2023. Internal Auditing & Risk Management, Vol. 21, No. 1S, pp. 76-94. https://doi.org/10.67276/cfgwklzkbf
BibTeX:
@article{dinuoctaviannicolescu2026545,
title = {Environmental Tax Revenue in the European Union: Composition, Convergence and the Limits of a Revenue-Based Indicator, 2000–2023},
author = {Dinu Octavian NICOLESCU},
journal = {Internal Auditing & Risk Management},
year = {2026},
volume = {21},
pages = {76--94},
doi = {10.67276/cfgwklzkbf}
}