Opportunities and limitations of the application of environmental taxes in agriculture

Abstract

The research problem is based on the increasing global environmental pollution, the reduction of the natural potential of countries, and the importance of exploration of effective measures for the solution of these issues. Scientists identify environmental taxes as one of the most effective means to solve this problem. Agriculture is one of the economic activities that may be influenced by environmental taxes. The literature analysis has suggested that the researchers have different approaches toward the functions of environmental taxes and their opportunities to contribute to solving environmental problems. The research aim is to theoretically substantiate the weaknesses, strengths, opportunities, and limitations of the application of environmental taxes in agriculture. Based on the analysis conducted, the present research identifies the environmental tax practices by identifying the weaknesses, strengths, opportunities, and limitations of the application. The following theoretical methods were used in order to substantiate the problem’s relevance: scientific literature analysis, comparative analysis, systemic analysis, generalization analysis, and other common research methods. The research described herein was conducted by Lithuanian and foreign researchers and published in peer-reviewed and international databases, such as WOS, and Scopus, which were analysed. The main opportunities are: environmental taxes in agriculture can contribute to the mitigation of the climate change consequences and to the implementation of the European Green Deal goals, contribute to a fairer tax burden after the environmental tax reform is implemented, create the possibility to reduce the tax burden on the business entities that reduce the environmental pollution. The main limitations are: fair tax burden may become distorted due to the complexity of identification of the impact, and may lead to the relocation of high-polluting businesses to countries with lower environmental tax rates or without any environmental taxes