The determinants of environmental protection in the European Union

In the last years in European economic policy, it has come to a paradigm shift from a necessary trade-off between economic growth and environmental quality, to the idea that economic growth can be achieved while or actually through increasing environmental quality: green growth. The extent to which European countries have achieved this in the past can be tested by looking at the growth of the size of their eco-industries, a synopsis of all their environmental protection expenditure aimed at improving environmental quality. Yet, there are large differences in magnitude of expenditures between countries. This thesis uses a multiple regression model with fixed effects to examine the determinants of the environmental protection expenditure in the EU-27. Nine determinants for both exogenous socio-economic conditions as well as endogenous environmental policy measures impact the variation. Good socio-economic conditions are therefore a necessity to implement stringent environmental policy that will lead to green growth.