COMPARISON OF THE EMISSIONS TRADING SCHEME AND ENVIRONMENTAL TAXES IN EUROPEAN UNION

Environmental tax is an instrument of each environmental policy. However, in the current legislation of all Member States of the European Union there is not a single legal definition, which ultimately leads to much confusion. In the polluter's viewpoint environmental tax may be an undesirable penalty of production or ecologically unfavourable behaviour, which leads to an increase of the tax burden. The article discusses the comparison of environmental taxes and emissions trading schemes as the economic market instruments used to reduce the burden on the environment. The article points out to a demonstration of their effectiveness, relevance, and interaction in the European Union. In the conclusion of this article, the focus is on the main barriers to their mutual interaction.