Problems and prospects of the decarbonization tools development in the Ukrainian economy

Abstract

The challenges of the 21st century force humanity to pay more and more attention to the problems of climate change. One of the levers of such a response could be the decarbonization of the economy, which involves a set of measures, technologies and methods that should limit the pace and scale of global warming and related consequences. This set of actions is implemented, firstly, by limiting the use and extraction of hydrocarbons and, secondly, by reducing the amount of greenhouse gas (GHG) emissions, such as СО2, СН4, N2O, etc. On November 13, 2021, the participants of the UN climate conference (COP26) in Glasgow adopted a final agreement on the adjustment of national climate goals by the end of 2022 and the "gradual reduction" of the use of coal-fired power plants due to the radical objection of India and China to completely abandon coal. Ukraine, in turn, expressed rather ambitious goals for reducing GHG emissions by 2030 to 35% compared to 1990 (ie, reducing CO2 emissions by 65%) by a government decision in July 2021. On the one hand, "The EU Green Deal" and the Second National Determined Contribution of Ukraine to the Paris Climate Agreement (NDC2) require significant investments, additional technological and financial resources for the transformation and modernization of the economy, stimulation of the natural resources rational use, environmental protection, improvement of taxation and control of CO2 emissions, rational use of revenues from the environmental tax. But on the other hand, there are corresponding opportunities to create an ecological centre in Europe, develop organic agriculture and modernize the existing taxation of environmentally harmful activities, which will become a driving force for the "green" course of the state. So, the purpose of the article is to outline the main problems and emphasize the prospects of the Ukrainian economy’s decarbonization tools development. The basis of the research methodology is dialectical and abstract-logical, induction, deduction, analysis, synthesis, statistical, graphical and tabular methods of scientific knowledge. The dynamics of carbon dioxide emissions by continent and the main polluting countries, CO2 emission tax rates, the structure of revenues from the main components of the environmental tax, models of price instruments for limiting carbon dioxide emissions, and a regression model of the tax burden impact on the volume of CO2 emissions were analyzed. Such measures allow forming the main recommendations for the government on the way to improving environmental taxation of Ukraine as one of the tools to decarbonize the economy using the experience of EU countries.