The Impact of the Russian Environmental Policy on Regional Investments in Environmental Protection

The implementation of the sustainable development concept determines economic growth while reducing the negative impact on the environment. To achieve this, investments in environmental protection are required, which, first of all, should be stimulated by the national environmental policy. The purpose of the article is to assess the impact of environmental policy instruments (charges for emission limits, charges for exceeding emission limits, fines, costs for eco-control, interbudgetary transfers, man- datory environmental insurance, regional tax incentives) on the development of regional investments in environmental protection in the constituent entities of the Russian Federation based on Federal State Statistics Service data. The research methods are panel regressions with fixed and random effects, the ty- pology of regions by industry specialization based on the values of the localization coefficients, various types of analysis (structural, groupings). Our findings demonstrate that the Russian environmental policy pursued in Russia contributed to a slight increase in current environmental expenditures in the regions, primarily in the regions of agricultural specialization, but did not stimulate an increase in environmental investments in fixed assets. As a result, environmental quality indicators did not improve in the majority of Russian regions. Eco-control costs (in industrial regions), and charges for emission limits (in industrial and agro-industrial regions) have the greatest incentive to increase environmental costs. Fines, interbudgetary transfers, mandatory environmental insurance, regional tax incentives do not have a significant impact on environmental investment in fixed assets in Russian regions. To improve the efficiency of the state environ- mental policy the authors propose to increase the charge for exceeding emission limits and fines for envi- ronmental law violation, to revise the target nature of interbudgetary transfers in terms of stimulating en- vironmental investments in fixed assets, and to implement pilot projects to introduce environmental pol- icy instruments that comply with best international practices.