Effectiveness of financial policies to protect the environment in the struggle against environmental problems

The fact that environmental problems affect the whole world on a global scale has made it necessary for countries to make joint decisions on environmental problems. As of today's point, it has been understood that environmental and economic policies should comply with each other to ensure sustainable development. The aim of this study was to evaluate and analyze the effectiveness of the fiscal policy instruments implemented in the EU and Turkey in the fight against environmental problems. In this respect, in the light of the data obtained from various statistical institutions, the effect of fiscal policies on environmental pollution in the period covering the years 1996-2018 for 27 EU countries and Turkey was empirically examined. Representing fiscal policy instruments, environmental taxes, environmental protection expenditures, and renewable energy consumption variables were included in the empirical analysis. Carbon dioxide emission and ecological footprint variables were considered as pollution indicators. In the study using panel data analysis method, the results obtained by applying unit root test, cointegration test, FMOLS and DOLS estimation methods to the variables were interpreted. As a result of the empirical research, it was determined that fiscal policy instruments reduced environmental pollution. It was concluded that incentives were the most effective policy tool in the fight against pollution among the fiscal policy tools. In addition, it was concluded that environmental taxes had a reducing effect on pollution in most countries included in the analysis. However, for most of the countries included in the analysis, no statistical relationship was found between environmental protection expenditures and pollution. Therefore, it was concluded that the least effective fiscal policy tool in the fight against environmental pollution was environmental protection expenditures.