Environmental Taxation and Expenditure in New Zealand

Abstract

Environmental accounting aims to understand the interactions between the environment and the economy. Environmental protection expenditure and taxes are two key environmental accounts that shed light on society’s economic response to environmental change. This paper discusses the role of environmental protection expenditure and taxes in the economy and presents the findings from Statistics New Zealand’s environmental-economic accounts on the extent to which these are used in New Zealand. Preliminary analysis of the relationship between environmental taxes and expenditure, using OECD data, shows a positive and significant empirical association between these two fiscal instruments.