The Environmental Tax Policy Review of Romania examines existing environmental tax practices in Romania related to GHG emissions and air pollution, with a focus on the residential buildings and road transport sectors. It offers strategic recommendations for both sectors through several activities: it provides a comprehensive overview of the current landscape of environmental taxation in Romania, highlights relevant international good practices, and proposes strategic reform options, while assessing their potential implications on fiscal, environmental and distributional outcomes through simulation tools.
Chapter 1 takes stock of Romania's environmental tax policy framework governing GHG emissions and air pollution. It reviews the legal framework, assesses the distribution of responsibilities across different levels of government and provides a broad overview of environmentally related taxes related to GHG and air pollution emissions in Romania.
Chapter 2 and 4 develop strategic reform options by examining the role of environmental tax policy within the broader policy framework (Chapter 2 focuses on residential buildings; Chapter 4 on transport). For the respective sector, each chapter discusses current challenges, develops an analytical framework to assess tax policy, examines main barriers and market failures, and highlights relevant tax policy objectives, drawing on international good practices and existing literature. The chapters conclude with actionable policy recommendations to better align Romania’s environmental tax framework with policy objectives.
Chapter 3 and 5 develop tailor-made simulation tools to assess the short- and medium-term impacts of selected tax reforms on tax revenue, environmental and distributional outcomes (Chapter 3 focuses on residential buildings; Chapter 5 on transport). The chapters conclude with recommendations to inform policy development and implementation. While these recommendations focus on the findings from the policy scenarios, broader recommendations on other policies are provided in Chapter 2 and 4.