THE IMPACT OF ENVIRONMENTAL PROTECTION EXPENDITURE ON ENVIRONMENTAL PROTECTION IN ROMANIA. EMPIRICAL ANALYSIS

The specialists in environmental problems have searched for tens of years to find the right methods for durable management of the natural resources that could assure the environment protection and, at the same time, stimulate the income generation. The majority of the world's governments integrated this objective in their national politics, as it has become increasingly important in the current conditions of climate change and environmental risks. In this context, the present study analyses the influence of the environmental expenses upon environment protection in Romania. The paper aims to identify the factors that contribute to improving environmental protection in Romania. Unlike in the existing studies, in this article, we use the ecological footprint of Romania as an indicator measuring the environment degradation and which implies expenses and investments meant for restoring and maintaining. The analysis covers the period between 2009-2018 and takes into account both the direct effect of environmental expenditures on pollution reduction and also the indirect effect of these expenses on the GDP level per capita, in the context of Kuznets' hypothesis (1960). The data used for this analysis (available at EUROSTAT for the period 2009-2018) was processed with the EViews software. The analysis was done based on a dynamic model used to approach both the direct effect and also the indirect effect of the governmental expenses upon the environment protection. The results that have been obtained confirm the fact that the economic growth is an important factor for improving the environmental protection, but in the countries with a low GDP per capita, such as Romania, the governmental expenses for the environment protection can be associated with the deterioration of the economic performances. At the same time, the results obtained by this study show that an increase of the environmental governmental expenses with 1% within GDP (by maintaining constant the rest of the explanatory variables) can lead to a reduction of the ecological footprint per capita with 0.01%. This fact would be the equivalent of growth for economic prosperity correlated with a reduction of the carbon footprint, determined by the modern sustainable techniques and practices and the prioritization of energy efficiency.