Proceedings of the 70th International Academic Conference, Madrid

WILLINGNESS TO BEAR THE FISCAL COSTS OF ENVIRONMENTAL POLICIES

LEDIA THOMO, INES NURJA

Abstract:

Nowadays, increased attention is being paid to the transition to a green economy as a model of living in a clean environment while protecting nature and ecosystems in a sustainable way for the future. However, this initiative cannot be achieved only by efficient policies and relevant objectives aimed at climate and environmental protection. These policies directly affect the cost of living of citizens and therefore their willingness to bear the costs that the implementation of these policies entails must also be considered. In countries with high incomes and developed economies, citizens have begun to accept environmental taxes with the vision of increasing their well-being also thanks to the environment where they live, avoiding the destruction of ecosystems, climate change and the negative consequences that it brings. While in developing countries, where the economy is not sufficiently stable and the economic and material standard is still contentious, these costs may encounter difficulties in implementation. This article attempts to shed light precisely on the willingness of citizens to bear the cost of environmental policies in developing countries by examining six WB countries: Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia. The data used for this study were taken from the fourth wave of the Life in Transition Survey (LITS IV), a survey conducted by the European Bank for Reconstruction and Development (EBRD). The analysis focuses on the willingness of individuals to support measures taken for environmental protection when they bring about an increase in taxes and consequently the financial burden on individuals. To capture this aspect, a composite index was constructed, including three variables identified to better represent the support for environmental protection when this entails a cost in the personal budget, such as the willingness to pay higher taxes to reduce environmental pollution, climate change and biodiversity protection. To outline the profile of this willingness, the determining factors were grouped into three dimensions: economic capacity, cognitive capacity and social context. The results show that higher income, higher education and stronger belief in climate protection are associated with a greater willingness to bear the fiscal costs of environmental policies. In addition, differences in support for environmental policies are also observed among the countries studied. The findings of the study show that the transition to a green economy should not only consider the formulation of accurate and efficient environmental policies but should also carefully study the economic possibilities and the social context in which it operates. Therefore, environmental objectives, which are important for preserving the environment, the fight against climate change that comes from the destruction of nature, microclimates and biodiversity, should be carefully combined with social protection and justice, given that intention and willingness can be objectively conditioned by the social and economic situation of individuals. The findings from the study suggest that only when policies consider a fairly and justified magnitude and distribution of the financial burden, can there be a willingness and sustainable acceptance in developing economies like the Western Balkans shows.

Keywords: Green economy; green taxes; climate change; family; Western Balkans; social acceptability; LITS-IV

DOI: 10.20472/IAC.2026.070.018

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