LUCRĂRI ŞTIINŢIFICE, SERIA I, VOL. XXI (2) 100 SUSTAINABLE ECONOMIC DEVELOPMENT AND ENVIRONMENTAL TAX SYSTEM IN THE EUROPEAN UNION CONDEA BOGDAN VIRGIL* 1 , BILȚI RALUCA SIMINA 1 , TRIFAN VANINA ADORIANA 1 1” Aurel Vlaicu” University of Arad, Faculty of Economics, Romania *Corresponding author’s e-mail: bogdan.condea@uav.ro Abstract: This paper presents an overview of the recent developments in environmental taxes in the EU countries. Throughout this work, the authors intend to demonstrate using qualitative and quantitative data that a method already implemented by some countries in order to fully support the principles of sustainable development represents the introduction of environmental taxes. The EU has made a firm commitment to ensure sustainability from the point of view of the environment by applying these taxes. The environmental taxes fall under the category of indirect taxes or consumption taxes and can be divided into three categories: energy taxes, transport taxes (vehicle taxes) and pollution taxes. The evolution of environmental taxation has taken different paths in the countries of the European Union, and in this article the authors analyze and compare these developments. Key words: environmental taxes, sustainable development, European Union INTRODUCTION The need to apply environmental taxes has arisen with the development of society and increased consumption of natural resources. These, inevitably, have had a negative effect on the pollution increase and degradation of the ecosystem. Since the development of society and implicitly the consumption of resources, cannot be stopped, the search for solutions to diminish the negative effects and protect the environment has begun. One step towards this is finding the necessary financial resources, i.e. applying the so-called environmental taxes. In this respect, the European Union has created several directives which set out the taxation method, but left it to each Member State to determine the level (share) for each tax, how to apply and collect them, and where appropriate, to grant certain facilities depending on the economy of each country. These environmental taxes are divided into three categories: Energy taxes, Pollution taxes and Transport taxes. The environmental taxes, also known as ecotaxes, pollution taxes or ecotaxes, and represent a wide range of legal fees for businesses and individuals to reduce environmentally harmful practices. There are many forms of environmental taxes, some of which are aimed at sanctioning those who issue harmful chemicals, some of which are intended to reward those who apply environmental practices. Within the EU, we find higher levels of environmental taxation, real, in terms of tax rates and tax revenues. According to the OECD, revenues from these taxes range around 3% of the GDP and 8% of the government revenue. Taxation and environmental taxes have grown greatly between 1987 and 1994. The interest towards these was raised within the EU around the 1970s. Following numerous conferences and lectures on the environment, the first programs developed environmental issues and also proposed long-term strategies for protecting the air, soil and water in the context of pollution reducing. At the end of the 1980s, the OECD (2003) attested the existence of around 100 taxes on environmental taxes, and according to their study, the number of taxes has increased. Pigou (1912) was the most influential author who developed ideas associated with the "economic welfare". The Pigouvian principle of taxation tells us that the environmental tax should be used to correct the externalities of the market. As a result, the environmental taxation offers a despondency of the polluting factors [10].